My Comcast Corp (CMCSA) shares were called away yesterday, so I needed to find a dividend paying replacement in the same sector, pulled the trigger on a cash secured put trade with Verizon Inc (VZ).
I have been watching Verizon closely since it dropped last month. It seems to have stabilized, but I’m still not sure if it’s safe to invest yet – here is the trade:
- Sold: Ten (10) Sept 15, 2023 Puts at $0.58
- Strike Price: $33.00
- *Premium Collected: $580.00
If I am forced to buy the 1000 shares, my entry price for VZ would be *$32.42, which is a 40% discount to Verizon’s $54.00 Morningstar Fair Value estimate. VZ also pays a large 7.09% dividend that I will start collecting in early October 2023 if I am put the shares, so that would add another $652.50 to the trade.
My original Comcast covered call was a mistake, but I managed to fix some of the damage last month by rolling the trade and ended up making a cumulative profit of $9,535.37, so life goes on!
*Excludes transaction costs.
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