New Puts for our Portfolio
Market Shadows sold six contracts of the June 2014, $20 puts on industrial infrastructure play Aegion (AEGN) today.
We received $900 (less commission) for committing to buy 600 shares at a net cost of $20 (the strike price) less $1.50 (the put premium) = $18.50 per share net cost, if they are eventually exercised.
Aegion’s 52-week range has been $17.32 to $26.09. Our break-even price is less than than the price at which any AEGN shares have changed hands during 2013.
The best-case scenario will see us keep 100% of the premium received. We will achieve that result if AEGN remains at $20 or above through the June 17, 2014 expiration date. If AEGN drops below $20 our committment is to buy 600 shares of Aegion at a net cost of $18.50 per share. That is something I would be happy to do.
The trade will now be shown as an open position in Market Shadows' Virtual Put Writing Portfolio .
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