LYG Buy/Write Strategy – Final Update & Profit/Loss Scenario
Well, some interesting things happened since my last post of LYG.
It ends up, I DID in fact get the dividend (they must have been mistaken) of .8477 per share.. so since I owned 100 shares.. that was $84.77 which I was paid out in a special dividend. SWEET!
However, that dividend somehow adjusted the options which I sold as well.. so as it turned out.. they expired on Friday and even thought the stock was trading at 4.68 I believe at that time.. my shares were called away, and the put expired worthless.
End of story, I made $90 on the trade in total after commissions. Which, from a starting point of $380, represents a 31% profit. I’ll take it! (Especially since the stock was down 1.22 from my buy point of 5.90 which would have been a $122 loss had I kept just the stock and not sold the options).
SOOOO.. I’ve done it again.
I’ve purchased DRYS at 6.00 and sold the $5 SEPT put/call at 0.40 and 1.34 respectively. Giving me a cost of $426 today (plus commissions of $20 total).
As I write this I’m down $9.50 on the trade, which is starting out just like the last one.. but I’m really liking my entry price of this stock which I’ve liked for a long time. I will sit on this trade for some time and see what transpires.
