The strategy is simple. Pick good under valued dividend stocks. NEM has active and liquid options that can be used to generate additional income by selling covered calls and puts.
NEM shortly after the opening fell a bit below $74 and I sold some puts. It's not $75.20. Because I sold NEM Friday at $72, I've missed a $3.20 move and the $0.55 dividend. Ex dividend today. But puts income more than makes up for that.
On the opening, sold NEM 3.11.22 $72 strike puts for $0.92. 1.243% RoR, 7-day trade, assumes 52 trades a year, annualized ROR about 64.8%. MOS about 2.7%. My NEM called Friday at $72 so this would be a replacement trade. Delta -.17.
Sold NEM 3.18.22 $70 puts for $1. RoR 1.353%. 11-day trade, assumes 33 trades a year, annualized RoR about 44.9%. Delta -.26. MOS 5.3%.
Previously sold NEM 3.25.22 $63 puts for $0.46. RoR on 22-day trade .651%, assumes 17 trades a year for annualized 10.8% RoR. MOS 10.9%. Delta now is -.07.
NEM closed at $74.28, up $3.60, or 5%. I let it be called. I'll sell some more $65 to $70 strike puts, depending on what the stock does next week. Meanwhile, I rolled my weekly covered calls on several other stocks today.
I haven't decided. My first thought was to sell 45-day puts at the market about an hour or two into Monday's session. If the stock corrects enough on the opening, I may sell them sooner. 45 days would give the trade time to work. That is, if the stock drops below my strike for awhile and then comes back to the strike, it may produce a better result. I'll let you know what I do. A lot really depends on what the stock, gold and the markets are doing when I decide to do the trade. Hate to be indefinite, but I usually make these decisions when I do the trades. Good question.
I sold the puts when the stock was around $73.93 to $74.20. Now $76.91. So I have about 50% profit on the sold puts.
NEM shortly after the opening fell a bit below $74 and I sold some puts. It's not $75.20. Because I sold NEM Friday at $72, I've missed a $3.20 move and the $0.55 dividend. Ex dividend today. But puts income more than makes up for that.
On the opening, sold NEM 3.11.22 $72 strike puts for $0.92. 1.243% RoR, 7-day trade, assumes 52 trades a year, annualized ROR about 64.8%. MOS about 2.7%. My NEM called Friday at $72 so this would be a replacement trade. Delta -.17.
Sold NEM 3.18.22 $70 puts for $1. RoR 1.353%. 11-day trade, assumes 33 trades a year, annualized RoR about 44.9%. Delta -.26. MOS 5.3%.
Previously sold NEM 3.25.22 $63 puts for $0.46. RoR on 22-day trade .651%, assumes 17 trades a year for annualized 10.8% RoR. MOS 10.9%. Delta now is -.07.
NEM closed at $74.28, up $3.60, or 5%. I let it be called. I'll sell some more $65 to $70 strike puts, depending on what the stock does next week. Meanwhile, I rolled my weekly covered calls on several other stocks today.
When you sell these PUTS against NEM, are you sticking with monthlies or doing some weeklies?
I haven't decided. My first thought was to sell 45-day puts at the market about an hour or two into Monday's session. If the stock corrects enough on the opening, I may sell them sooner. 45 days would give the trade time to work. That is, if the stock drops below my strike for awhile and then comes back to the strike, it may produce a better result. I'll let you know what I do. A lot really depends on what the stock, gold and the markets are doing when I decide to do the trade. Hate to be indefinite, but I usually make these decisions when I do the trades. Good question.
Samuel Smith has an excellent post on NEM at SeekingAlpha.com this morning. https://seekingalpha.com/article/4492584-newmont-keep-calm-let-dividends-flow