Options trades: GMR, BMY, AT&T & REG
As the market has continued to move higher, most of my watchlist stocks have moved farther away from the prices/valuations that I’m willing to pay for them. As a result, I’m continuing to mostly avoid selling shorter-term near-to-the-money put options in favor of longer-term options at strike prices farther out of the money. Here are my latest short put positions:
Bristol-Myers Squibb (BMY: 25.65 0.00%, yld: 4.87%) – On 8/28/09 I sold some March 18-strike puts against BMY on weakness:
I’m currently short some September 17.5-strike BMY puts, but they’re now almost worthless and seem increasingly unlikely to end up in-the-money (ITM) so I decided to add this position in anticipation of the September puts expiring OTM. The shares of this pharmaceutical company would seem to be a good value below $20 and would yield over 7% at my cost basis if I’m ultimately put the stock.
General Maritime (GMR: 7.66 0.00%, yld: 16.32%) – On 9/1/09 I sold some November 7.5-strike puts against GMR on weakness:
GMR is currently in a short-term downtrend while its intermediate-term picture remains unclear; longer term it may be in the process of bottoming near support in the $5-$7 region. This oil tanker operator has a decent balance sheet and a recently reduced – and more sustainable – annual dividend of $0.50 per share, which will translate into an over 7% yield at my cost basis if I’m ultimately put the stock.
Regency Centers (REG: 36.81 0.00%, yld: 5.03%) – On 9/3/09 I sold some April 22.5-strike puts against REG on weakness:
The units (the equivalent of shares in a corporation) of this high-quality REIT (Real Estate Investment Trust) that owns, develops and operates shopping centers anchored by grocers and other specialty retailers in nearly 30 states are currently presenting a somewhat neutral/unclear intermediate-term picture. However they’re well off their highs from earlier this year. If I’m ultimately put the units, my cost basis will be at the March lows and the units will be yielding almost 9% (based on the current – reduced – dividend distribution).
AT&T (T: 25.52 0.00%, yld: 6.47%) – On 9/1/09 I sold some April 20-strike puts against T on weakness:
The shares of this telecom provider are currently presenting a neutral/unclear intermediate-term technical picture. Valuation would seem reasonable in the low- to mid-$20s, and increasingly attractive below those levels, which would be my cost basis if ultimately put the stock (along with a dividend yield of over 8%).
