On July 2, 2019, I made the following in the money (ITM) put sell - PNNT DEC 20'19 7.5 @1.4
This is already the thirty-fourth (#34) 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.
PNNT has been in our portfolio since September 2018, when I first bought it at $7.74 per share, see Latest Stock Buy: PNNT.
Since then I have bought some more PNNT shares in 2019, paying already $7.14 per share, see Latest Stock Buy: PNNT
Currently, PNNT is trading $6.36 per share, which is a huge 17.8% drop from the price I paid in 2018, or a 10% drop from the price I paid in 2019. Actually currently PNNT is trading -18% from its 52 weeks high, probably I bought when it was oversold.
With the current share price and yearly dividend payout of $0.72, the dividend yield is 11.3% (before taxes). Dividends are paid quarterly in the following months - Jan, Apr, Jul, and Oct.
Got for this trade a premium of $140, but I will be obligated to buy 100 shares of PNNT if the price will stay below $7.5 USD per share by Dec 20, 2019.
Break-even price: $6.1
This latest trade gives 39.16% yield annually
In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $6.1 or just $610 for 100 shares of PNNT with an annualized dividend at $0.72 that's 11.80% dividend yield.
I took this trade because of the following reasons - to boost my total options income in July, and in case I will get assigned in December I will have a nice boost for January 2020 dividend income.