On April 12th, 2019, I made the following put sell - WPG JUL 19'19 5 Put @0.30
This is already the seventh (#7) 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.
WPG stands for Washington Prime Group, and it has been in our dividend income portfolio since the end of 2018, see Latest Stock Buy For Child Investment Portfolio: WPG
As we already own this stock and would love to increase our share here, I love the idea that I could get it on discounted price + I can collect premium upfront.
The dividend yield for this stock has been crazy, it has climbed from 15.97% back in November 2018 to 18.83% in April 2019. The reason is plain simple, the stock price for WPG has dropped from $6.26 (November 2019) To $5.31 (April 2019). There have not yet been announced dividend cuts.
Anyway, dividend cuts are very possible, but I still like this stock and despite with my latest put sell I'm more looking just to collect the premium, I wouldn't mind buying WPG at the end.
Got for this trade a premium of $30, but I will be obligated to buy 100 shares of WPG if the price will drop below 5 USD per share by July 19, 2019. Currently trading at $5.31.
Break-even price: $4.7
This latest trade gives 20.56% yield annually. In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $4.7 or just $470 for 100 shares of WPG, with an annualized dividend at $1.00 that's a whopping 21% yield.