Options Trade – U.S. Bancorp (USB)

I made a new Cash Secured Put trade in U.S. Bancorp (USB) on Friday – not feeling the love for this trade, but it was just so darn cheap. The recent failures of Silicon Valley Bank and Signature brought attention to smaller banks like U.S. Bank, which put it on my radar screen. When Moody’s Downgraded 11 Regional Banks, Including U.S. Bank on Friday – sending the stock even lower, I could not resist a trade – even though I don’t love the industry.

Here is the trade:

  • Sold: Ten (10) May 19, 2023 Puts at $0.60
  • Strike Price: $30.00
  • *Premium Collected: $600.00

If I am forced to buy the 1000 shares, my entry price for USB would be *$29.40 (which is 49% lower than Morningstar’s $58.00 intrinsic value estimate). USB also pays a 5.73% dividend, that I would start collecting in June 2023 if I am put the shares. Given the volatility in the banking sector, I may look into buying some Puts on Monday at a lower strike price.

*Excludes transaction costs.

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