Options Trade – Merck (MRK)

Earlier Today, I sold 10 March 2016 weekly Put Contracts (50 Strike) for Merck (MRK) – to open a trade.  These options expire on March 11, 2016 – before Merck goes ex-dividend on March 15, 2016.

*Premium Collected: $1,200.00

Here is my strategy breakdown on Merck:

• Sold the puts with a large Margin of Safety built in – with the $1,200.00 premium collected, my effective MOS is over 23%.
• If I get put the Merck shares – I will collect a Dividend in early April 2016 – $460.00.
• I will immediately sell longer term Call Options to lower my Margin of Safety even more – estimate another $1,000.00 in premium.

I am making this trade because I need more exposure to both Equity and Healthcare – hopefully I will be put the shares this time.

*Excludes transaction costs.