Now that I've slept on it, I want to raise cash.
As I mentioned in yesterday's update, we are very bullish, perhaps too bullish in our Income Portfolio and we are also 100% ahead of schedule and more like 250% counting the gains from our buy/writes, some of which are well in the money. Since we aren't thrilled with the overall economic picture and, since we're supposed to be learning new techniques and, since I think it's time to start a fresh Income Portfolio anyway, let's go through our positions and learn how to sell in May and go away with style.
We're not purposely cashing it all out but we won't be upset to be cashed out on some - and I'm sure you'll see why. I'm going to comment on every position with red highlights for action items, we'll start with our short puts:
- 20 HCBK July $9 puts sold for $1.45 (-$2,900), now $2.10 – down $1,300
- 1,000 HCBK at net $6.83, now $6.79 – .08 dividend expected 5/8 ($80)
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- HCBK is now $6.79 and we essentially own them for $9. They pay a .32 dividend and we already have 1,000 shares uncovered so let's sell 20 July $7 calls for .30 ($600). If we're over $7, then we lose our current 1,000 shares (but get paid $7) and we'll have 10 short calls to roll into July, where anything between $7 and $9 is an improvement to our current short puts.
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10 GE Jan $17.50 puts sold for $2.10 (-$2,100), now $1.38 – up $720
- I don't see GE popping $20 very easily but let's cash these puts in and sell 15 April $19 puts and calls for .99 to raise $1,485 that will expire in April. As we're willing to own GE long-term, either being forced to roll the puts or forced to buy stock to cover (with $2,195 already in our pocket) is not something we're worried about.
