DGI Adventure 08-30-16 Sold Cash Secured Put  – Gilead Sciences, Inc (GILD) – $79.00 strike – Sept 23 Expiration

I went out of town last week for a buddy’s wedding, so this trade was actually executed on Tuesday 08/23/16. I just didn’t get a chance to write about it until today.

My previous GILD put expired just barely out of the money on 8/12/16. I waited a bit before re-initiating the position, but this is basically the same thing as before.

I went through the logic of buying more GILD back in January, so this won’t rehash the full investment thesis process.

I have however updated the portfolio page and income tracker back at the mother ship to reflect these trades.

Dividend Cycle

Ex-div is 9/14/16 which will occur before this trade expires. The payout should be $0.47/share. I already own 53 shares in other accounts, so it’s not like I’ll totally miss out on the dividend. But unless the put option is exercised early, the shares involved in this trade probably won’t be paying me a dividend this quarter. That’s okay, though. The premium is more than double the dividend distribution.

Investment

SPL (Strike Price Logic)

I would rather have an expiration just before the ex-dividend date rather than after, so that if I am assigned, I get a relatively quick payout, but the September 9th and earlier contracts with a $79 strike weren’t paying much premium at the time. My last strike price was at $79 and I liked the idea of being below $80, so I went out a little further to get that.

Of course maybe I should have waited. The price has moved against me and the position is now in the money at time of writing. Oh well. Thou can’t time the market so thou shalt not try to.

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