DGI Adventure 10-14-16 Sold Cash Secured Put – Target Corporation (TGT) – $67.00 strike – Nov 04 Expiration

This trade was actually executed on Tuesday 10/11/16. I didn’t get a chance to write about it until today.

I went through the full blown investment thesis process back when I wrote up the original TGT put investment thesis, which was published in August.

The point of this post is just to document the trade.

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

Dividend Cycle

TGT shares will go ex-dividend on 11/14/16. The distribution will be $0.60/share for the second quarter in a row. That payout was raised from $0.56 (a 7.14% increase) with the Q3 payment. That wasn’t a big surprise since Target is a dividend champion, boasting 49 consecutive years of increases.

The premium from this trade exceeds the dividend distribution by $0.1391/share, and the trade will expire ten days before the ex-dividend date.

Investment

SPL (Strike Price Logic)

Back in August I was happy to have a strike price of $69/share. So why wouldn’t I take a $67 strike?

Plus the premium pays a higher total amount and a better annualized yield., with a similar amount of downside protection.

Yes please.

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