Courtesy of Yodi
I am looking at Entergy Corporation (ETR), a US electric untility company. It's trading at $70.37.
Here is my play. Buy the stock @ about $70.4. It pays a dividend of 4.9.% Sell the Sept strangle $72.5/$70 for a credit of about $7.45, thereby reducing your purchase to about $63. The stock's two year range was between $58 and $84. The Dec. 15 low was $62.80. You might say the Sept. $70 put is very close to the fire! I would not mind having the stock assigned at around $66, discounting the credit of $4.75 from the sale of the put.
As usual any comments wellcome and do your own research.
The full positions is this:
- Buy 100 shares of stock @ about $70.37.
- Sell a Sept call strike price $72.5.
- Sell a Sept. put strike price $70.
