Latest Stock Buy: Energy Transfer LP (ET)

Updated: 28 May, 2019 seen 67

On May 18, 2019, I bought (actually got assigned) 100 shares of Energy Transfer LP (ET) at $15.00 per share. 

With its quarterly dividend payout of 0.3050 dollars per share, this latest buy has a dividend yield of 8.1% and will pay us $30.50 (before tax) every month. Awesome! 

ET is paying a dividend in the following months - February, May, August, November. Most of these months are lowest for my dividend income and now having ET feels very right and good. 

I first learned about ET back in April, then decided to sell options on it:

ET stands for Energy Transfer Equity, and I had not a single clue about this company until today, actually, I found this ticker on Google Spreadsheets and after a brief investigation, I decided to sell a put on this stock.

I got for this trade a premium of $35, but as the stock price dropped below 15 USD I got assigned it at the end. Put Selling: ET MAY 17'19 15 Put @0.35

 Now, I immediately started selling covered call options on ET and collected already an additional premium of $14. #18 Covered Call Sell: ET MAY 31'19 15 @0.14

I like ET stock for many reasons, it has not only great dividend, but I can also sell weekly options on it. 

When selling put on ET, here is what I thought:

Now, this trade actually comes out of my league, as I tend to write puts only on stocks costing ~ $6.00 per share, as $600 is the approximate budget on a monthly basis I can afford to spend with ease and no regrets on an options trade. In the case of ET, if I will be assigned 100 shares of it, it will cost me $1,500. To stay on the track here is the plan - I will sell off shares worth $900, leaving me with shares worth $600 or about 40 shares of ET, which I'm ready to hold for long and collect dividends.

I still decided to keep all 100 shares at the end and close the negative balance (I bought on margin this time) in the coming months.

The Bottom Line

As it was unplanned purchase this time, I have a negative balance of -$1,500 with my broker. I believe it will take some time before I will close this gap and buy other new stocks.