Today with PG trading down at ~61.80 I entered into the following transaction:
06/18/2012 STO 2 PG Jul 21 2012 60 Puts @.61 $110.49
This is a 33 day trade that starts out using ~$2000 in margin maintenance. If they expire worthless we will earn 5.52% return on maintenance in 33 days or 61.05% annual.
PG, a tried and true Dividend Champion/Aristrocrat, has shown a lot of support at the 60 level. If put to us our yield on cost will be 3.78% which is much higher than the historical average. If the price sinks we should be able to roll out and down for a net credit, therefore, an exit strategy is in place.
61% is not a bad return.
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