• Cash King
    Sold $PSEC Put $17.5 Strike 21 Nov 14. Adjusted Cost basis if executed would be $9.30. If not, I just made a 110% annualized return.
    6/5/14
    Reply (25)
    • Rob1492: Not understanding this - selling put for 17.5 with premium of 8.2 thus cost basis 9.3. Also forgoing dividends of .55 - not sure advantage
      6/5/14
    • Cash King: 1) Better than waiting to buy a little lower and it never going there. 2) Also, an opportunity to get a premium collected without ever...
      6/5/14
    • Cash King: having to buy. 3) It may never get to $9.30 for me to buy at that price. It is a long holding and I don't mind forgoing $0.55 in dividends..
      6/5/14
    • Cash King: for many dollars of dividends in the future.
      6/5/14
    • Cash King: Bottomline I believe this price we are seeing now is short term based on SEC and other issues. Once that is cleared up within a few months..
      6/5/14
    • Cash King: I see $PSEC back above $10 or $11/share.
      6/5/14
    • Rob1492: But if you purchased now 9.63 by November after subtracting the Div. your cost basis would be 9.08...
      6/5/14
    • Cash King: Uh no. I would have dividends but my cost basis would still be $9.63.
      6/5/14
    • Cash King: Also, if $PSEC goes up like I expect it to there is an increasing chance that the options won't be executed and now I just got $800 free.
      6/5/14
    • ads7w6: $PSEC will not go above $17 so the options will be executed. Also, he was not referring to your tax basis, he meant more your all-in cost...
      6/5/14
    • ads7w6: through November would be lower buying today and collecting dividends than shorting the puts
      6/5/14
    • Rob1492: There is no chance the stock will get past 12 by November never mind 17.5 of course it will be executed
      6/5/14
    • Cash King: 1) Just because the price does not go above the option price does NOT guarantee it will be executed. I have had options that were not...
      6/5/14
    • Cash King: executed below the price. Can't explain why but they weren't. Let's assume it is executed. The point being my cost basis on $PSEC is...
      6/5/14
    • Cash King: $9.30. So, anything above that and I've made money. If it is executed with the price above $9.85 then I've made money over holding now...
      6/5/14
    • Cash King: through the dividends. I believe it will climb back up to $10 or $11 when the SEC stuff is done.
      6/5/14
    • Cash King: Since it closed up today at $9.66 it is not far from $9.85. Also, the bottom line is like buying clothes, a car or anything else I'm getting
      6/5/14
    • Cash King: it at rock bottom cost that future dividends will be paid off of. It is a long term hold so a key is to get at low cost.
      6/5/14
    • William Packer: Cash, it is always executed if the put has intrinsic value. No one would let that slide. Lol. You gave up your liquidity too
      6/6/14
    • Cash King: I'm not short on liquidity. :) I'll take a tiny bit less liquidity for a great cost for a long term hold.
      6/6/14
    • Cash King: $9.77 this morning. :)
      6/6/14
    • Cash King: Ok, I'll admit though that it wasn't the best pick but it was a pick I can live with and like. :)
      6/6/14
    • Joshua Heller: If I am understanding correctly, you are forgoing $0.55 in dividends to collect $0.50 in option premium.
      6/6/14
    • jesstradin: Been watching FSC adding bits when share price drops below nav.A good golden goose that lays monthly.
      8/12/14
    • Cash King: I'll take a look at FSC
      8/12/14