August options trades and expiration: PCU, VZ, PG, PWE, HD & more!
This past week was August options expiration and I had the following options positions expiring:
- Cal-Maine Foods (CALM: 30.07 -0.03%, yld: 3.14%) – The August 17.5-strike puts I sold against CALM on 6/2/09 expired out-of-the-money (OTM) for a 2-1/2-month net return of 2.8%.*
- Cintas (CTAS: 27.44 +1.22%, yld: 1.77%) – The August 15-strike puts I sold against CTAS on 3/6/09 expired OTM for a 5-1/2-month net return of almost 8%.*
- Home Depot (HD: 29.68 +0.92%, yld: 3.17%) – The August 17.5-strike puts I sold against HD on 5/29/09 expired OTM for a 12-week net return of 2%.*
- Penn West Energy Trust (PWE: 18.96 +1.28%, yld: 9.99%) – The August 10-strike puts I sold against PWE on 7/8/09 expired OTM for a 6-1/2-week net return of 3.8%.*
- Penn Virgina Resources (PVR: 23.91 -0.29%, yld: 7.84%) – The August 12.5-strike puts I sold against PVR on 7/15/09 expired OTM for a 5-1/2-week net return of 2.2%.*
- Universal Corp. (UVV: 37.54 +1.40%, yld: 5.05%) – The August 30-strike puts I sold against UVV on 6/23/09 expired OTM for a 8-1/2-week net return of about 5.3%.*
New positions
- Pepco Holdings (POM: 18.20 +0.11%, yld: 5.94%) – On 8/7/09 I sold some February 12.5-strike puts against POM, an electric utility that currently offers a dividend yield of over 7%.
- Procter & Gamble (PG: 60.40 +0.18%, yld: 3.06%) – On 8/6/09 I sold some January 45-strike puts against this consumer products maker after it sold off on disappointing fourth-quarter earnings.
- Southern Copper (PCU: 0.00 N/A, yld: N/A%) – On 8/7/09 I rolled out and up my September 20-strike covered calls against my long position in PCU by buying them back and selling some January 2011 22.5-strike calls at a net credit. This avoids having the stock called away in the near term and generates some additional yield from the position.
- Verizon (VZ: 30.83 -0.03%, yld: 6.16%) – On 8/17/09 I sold some January 25-strike puts against this telecom provider during some market weakness. At under $25 – the price I’ll pay if I’m ultimately put the stock – VZ will be offering a dividend yield of over 7%.
* As always, the return on “cash secured” put sales was based on the premium received from the sale of the options (minus commissions) against the unmargined capital set aside to pay for their possible assignment (i.e., my being put the shares of the stock).
