#32 Put Sell: 2 CDR OCT 18'19 2.5 Put @0.15

Updated: 23 December, 2019 seen 18

On July 1st, 2019, I made the following out of the money (OTM) put sell - 2 CDR OCT 18'19 2.5 Put @0.15

This is already the thirty-second (#32) put sell from my short options trader career. For now, it seems I've found my way in options trading - I'm selling puts against (high) dividend paying stocks I already own or I would like to have.

CDR stands for Cedar Realty Trust -  a publicly traded real estate investment trust that invests in shopping centers in the Mid-Atlantic states. As of December 31, 2017, the company owned 61 properties containing 9.0 million square feet, including 26 properties in Pennsylvania.

CDR currently is trading at $2.57 and has a yearly dividend payout of $0.2  giving a yield of 7.8% (before tax). CDR pays a quarterly dividend in the following months: February, May, August, November. In case I will get assigned this stock, I will get a small boost in these months for the dividend income.

Got for this trade a premium of $30, but I will be obligated to buy 200 shares of CDR if the price will drop below $2.5 USD per share by OCT 18, 2019. 

  • Break-even price: $2.35

This latest trade gives 16.88% yield annually

In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $2.35 or just $500 for 200 shares of CDR with an annualized dividend at $0.2  that's 8.5% dividend yield.

As the strike price is just $2.5 I took 2 lots for this position. 

I took this trade because of following reasons - to boost my total options income in July, and in case I will get assigned, I will be able to sell covered calls, last but not least CDR could give a little dividend boost in some of my lowest dividend income months.