On April 3rd, 2019 I made my third options trade. This time I decided to collect premium from stock I already own and wouldn't mind having in my portfolio for discounted prices. So I write following put sell - WPG OCT 19'19 5 Put @0.4
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
The dividend yield for this stock has been crazy, it has climbed from 15.97% back in November 2018 to 18.21% in April 2019. The reason is plain simple, the stock price for WPG has dropped from $6.26 (November 2019) To $5.49 (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 $40, but I will be obligated to buy 100 shares of WPG if the price will drop below 5 USD per share by October 19, 2019. Currently trading at $5.95.
Break-even price: $4.6
This latest trade gives 13.79 % yield annually. In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $4.6 or just $460 for 100 shares of WPG, with an annualized dividend at $1.00 that's a whopping 21% yield.
There are not many stocks I can afford for options trading, that's why I'm looking on stocks under $6 per share.