Put Selling: ET MAY 17'19 15 Put @0.35

Updated: 23 December, 2019 seen 60

On April 10, 2019, I made following put sell - ET MAY 17'19 15 Put @0.35

This is already the fifth put sell in 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.

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

ET currently is trading at $15.47 and has a yearly dividend payout of $1.22 giving a yield of 7.88%. Dividends are paid quarterly in the following months - Feb, May, Aug, and Nov. These are the months I'm always worried about, in case I will be assigned ET stock before options expiry I will have 100 shares paying me dividends in lowest months of the year. Awesome.

Got for this trade a premium of $35, but I will be obligated to buy 100 shares of ET if the price will drop below $15 USD per share by May 17, 2019. 

Break-even price: $14.65

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 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.

This latest trade gives 21.44 % yield annually, which now is second highest after jaw-dropping but risky 54.75% FTR PUT (see: My First Option Trade: FTR Aug16'19 2 Put @0.45)

In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $14.65 or just $1,465 for 100 shares of, ET with an annualized dividend at $1.22  that's a decent 8.32% dividend yield.

If I will sell off 60 shares and leave myself 40, in a year additionally I will collect $48.8 in dividends. Or $12.2 quarterly. Sounds good to me

The Bottom Line

By now I have already collected $229.00 in premiums from just 5 option trades. None of my trades yet has expired and by now I have used cash in the amount of $5.600 to secure this trades. That gives us ~ 4% yield so far. 


Hi! My name is Reinis Fischer (38). Dad, husband, options traderdividend income investorcrypto hedge fund manager, drone enthusiast, world traveler, photographer, and passionate lover of Georgian cuisine (vegetarian). 

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