I sold Puts on General Electric (GE) today – taking advantage of the market crash. This trade makes me nervous, but GE is just getting way to cheap – here is the trade:
- Sold: 10 March 16, 2018 Puts
- Strike Price: $14.00
- *Premium Collected: $500.00
If I am forced to buy the 1000 shares, my entry price will be $13.50 per share – almost a 42% discount to GE’s Morningstar Fair Value. General Electric is currently paying a 5.51% dividend – but I anticipate this being cut in 2018.
Note: This is a speculative trade – there are very good reasons for GE to be selling off, including a lot of debt. I also anticipate GE getting pulled from the S&P 500 at some point in 2018 – but there are some reasons for hope:
- Investors Business Dailey – 5 Potential Catalysts
- Seeking Alpha – Why General Electric Could Outperform This Dividend King – Emerson …
Extra: The market is getting ugly today – will Trump take credit?
*Excludes transaction costs.
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