DGI Adventure 09-09-16 Sold Cash Secured Put – Whole Foods Market, Inc (WFM) – $27.50 strike – Sept 30 Expiration

This trade was actually executed on Wednesday 09/07/16. I didn’t get a chance to write about it until today.

I originally did a full blown investment thesis way back in  October of 2015, when my wife was considering buying shares for her Roth IRA. She ended up pulling the trigger a few weeks later. Of course the share price has bounced around a lot since then, but it hasn’t really gone anywhere. Her entry point was an amazing example of gaff fishing at it’s finest!


WFM One Year Chart – Courtesy Yahoo! Finance

Wednesday was a rough day for grocery store stocks, because Sprouts Market (SFM) reduced their same store guidance for the rest of the year.

I’m not joking….here’s a retarded article written by an illiterate robot “named” Rachel Aldrich to prove it.

The ticker symbols are kind of similar I guess? IDK.

Anyway, I sold a put. This post is only intended to record the trade.

I have updated the portfolio and income tracker back at the mothership to reflect this position.

Dividend Cycle

The current quarterly payout is $0.135/share and the stock is due to go ex-dividend at the end of September, so it could be right around when this trade expires. We’ll see. The premium is worth nearly double the dividend distribution.

I fully expect WFM to become a dividend challenger when they raise the distribution in the first quarter of next year.

Regardless of what Sprouts’ revised same store guidance may be.



SPL (Strike Price Logic)

Just look at that one year chart!

It’s bounced several times around $28.50. So $27 seems miles away from that. I would have liked to get $26, as that would represent a 2% yield at the current distribution, but that strike price lacked attractive premiums. Assuming they raise the dividend again next year, I’m sure a $27 entry point will represent a very attractive invested yield.

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