I made a Covered Call trade on Merck & Co Inc (MRK) today – still trying to find any value in this epic bubble of historic proportions.
Merck was down this morning, so I was able to make the following trade:
- Bought: 500 shares of MRK at $77.34
- Sold: Five (5) June 18, 2021 Calls
- Strike Price: $80.00
- *Premium Collected: $595.00
So, my entry price for MRK was $76.15 If I am forced to sell the 500 shares in June 2021 at the $80.00 strike price, my profit will be approx. $2,520.00.
Since my entry price is over a 23% discount to Merck’s Fair Value of $100.00 per share, I feel this trade provided a decent Margin of Safety. Merck also pays a 3.34% dividend that I will start collecting in June 2021.
*Excludes transaction costs.
Leave a Reply