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Thursday, April 25, 2024

Top Trades for Wed, 16 Dec 2020 12:45 – MO

phil
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Top Trades for Wed, 16 Dec 2020 12:45 – MO
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Maybe a glitch?  I'm sure they are paying it.

MO dividend is a very fat 8.16% now at $3.44 per $42.87 share.  As a new trade, you can:

  • Buy 1,000 shares of MO for $42.87 ($42,870)
  • Sell 10 MO 2023 $35 puts for $4.50 ($4,500) 
  • Sell 10 MO 2023 $40 calls for $6.25 ($6,250)

That's net $32,120 and the spread pays back $40,000 if called away in two years with a $7,880 (24.5%) profit plus the $3,440 dividend x 2 is another $6,880 (21.4%) so a very nice way to tie up $32,120 to make $14,760 while we wait for MO to get into the hemp/cannabis space.  

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