This trade was actually executed on Wednesday 08/17/16. I didn’t get a chance to write about it until today.
This is an existing position, I’m just trying to move ownership of shares into a tax advantaged account. The dividends are unqualified, so I pay full income tax on them if I hold shares in my taxable brokerage.
The next ex-div date is 9/28/16. The quarterly payout continues to be $0.1375/share for now. As management gets their act together, that should eventually be increased, but there’s a while to go yet I think. This trade will expire before the ex-dividend date, and represents 72% of the quarterly payout.
SPL (Strike Price Logic)
Back on 8/17, when this trade was executed, my $10.50 puts were looking like they would end up in the money when they expired on 8/19 (they did…I got assigned). REITs were experiencing a bit of a pull back at the time…I guess because people were trying to anticipate the FOMC meeting minutes “tone”?
Who knows? The point is the share price was down a couple days in a row, and then really dipped pretty drastically in early morning trading. In fact the price had dipped as low as $10.19 at one point.
In other words, the $10 strikes were in play, and they were paying pretty well. If I’m okay getting assigned $10.50 strikes…$10 is even better right?