I am probably reaching here – just trying to get some new equity into my portfolio at a reasonable cost. I made another trade for GlaxoSmithKline PLC today – as you may recall, I have been trying to procure shares of GSK for under $34.00 per share – but have failed to date. I have raised my target price a little for this trade – which is usually a mistake. Here is the trade:
- Sold: Ten (10) April 30, 2021 Puts
- Strike Price: $35.00
- *Premium Collected: $450.00
If I am forced to buy the 1000 shares, my entry price will be approx. $34.55 per share – over a 28% discount to Glaxo’s Fair Value of $48.00 per share – providing a comfortable Margin of Safety. Glaxo also pays an attractive 5.75% dividend.
*Excludes transaction costs.
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