Today I sold 1 GE Nov08 15 Put for a net deposit of $94.25 in an IRA account. If put to me my basis in these GE shares would be 14.06.
I just could not resist the opportunity to own GE at this depressed price, at least if it is put to me. GE is currently paying a dividend aver 8% at it current price. Just a few minutes ago GE announced that it will continue to pay its current dividend. That was the final catalyst that caused me to sell this put as GE trades just a few pennies over 15.
I normally try to trade at least two contracts but am still feeling cautious, despite my feelings for GE, that I am only making small trades at a time. The fact that I don’t have a great deal of available cash right now reinforces the smaller trades.
I think this is a strong trade for the reasons you stated.
now that the market has rallied you should have sold 2..haha
where do you have your IRA that it allows you to sell puts? TD Ameritrade only allows me to do covered calls in my IRA.
Hi Blue Bluff…
Thanks for the comments.
It looks like I am going to own GE after tomorrow. It’s down under 13 after today’s close. I am still okay with it even though my basis will be just over 14. I could roll it out but at this point I think I’ll take it and sell covered calls on it. I may even sell some additional puts at the 10 or perhaps 12.50 strike price.
I have my IRA accounts at E*Trade. At one time they only allowed covered calls in IRA accounts also. I forget exactly when they changed but it was at least 3 years ago.
it looks like the GE trade worked out after all…good luck to you