STO (2) Naked Put - EMR (EMERSON ELECTRIC CO) Sep 09 @ $32 Strike for $0.60 each. Net Premium $119. This is another solid company with a 30+ year track record of raising dividends. They need the economy to turn around to start going up but they have been in a tight trading range for about a year now. The stock was really good to me earlier in the year and I will not hesitate to enter another position on an additional 5% pull back.
Risk Management:
Ticker: EMR
Expiratoin: 18-Sep-09
Invest Date 18-Aug-09
Current Stock Price $34.10
Strike Price $32.00
Premium $0.60
Annual Dividend $1.32
Days to Expiration 31
Return (Assumes CSP) 1.88%
Annualized Return 22.08%
Downside Protection 7.92%
Effective Dividend if Put 4.20%
5 days ago
Chris
ReplyDeleteSo are your feelings that the pull backs are short term adjustments and that the market will not have a larger and longer pull back like earlier this year?
Can you share higher level info about your success and plan - for example % of portfolio held in cash, monthly income %/value?
It would be a good profile to match for us noobies.
I generally feel the the market from here is neutral. If it is bullish I win also. If it is bearish I am also okay because my NPs have downside protection. Also I am only entered 25% - 50% of a given position at a time. So for example if EMR slipped to $32 I would then write puts down to $29 or $30 and average down my cost.
ReplyDeleteI aim for 2-3% per month but I have well surpassed that. August will fall at about 3% right now (unannualized) but that is because I was in about 75% cash. I am probably about 50% cash right now. My best month I made 29% and most months fall in the 5-10% range. In the past 12 months I have approximately doubled my account value - still less than 6 figures though. Keep in mind that the last 5 months have been an exceptional time for CCs and NPs and I do not expect this rate to continue.