Made a trade on Intel (INTC) last week – trying to get some beaten down Tech into my portfolio. Along that theme – I made trade for Cisco Systems Inc (CSCO) today – the stock is lower going into earnings with a high implied volatility – giving the short term options a very attractive premium.
Because of the high implied volatility, I was able to make the following trade:
- Sold: Ten (10) November 20, 2020 Puts
- Strike Price: $32.00
- *Premium Collected: $530.00
If I am forced to buy the 1000 shares, my entry price will be approx. $31.47 per share – over a 34% discount to Cisco’s Fair Value of $44.00 per share – providing a comfortable Margin of Safety. Cisco also pays a very nice 4.01% dividend.
*Excludes transaction costs.
Leave a Reply