Bear Put Spread on Dover (DOV) with 84% expected return

I’m continuing to position defensively as the election approaches.

music selection:  “Run With The Pack” — Helstar

weigh-in:  216.2 (0.2)

No positions expired over the weekend and none expire until 13NOV2020. My November expiries are mostly well within the money. KO has been skirting the edge but I expect it to be stable no matter what happens with the election. I’m on track to earn 4,436 in closed options income for the month.

Dover (DOV) is a specialty machinery company and a Dividend Aristocrat with 57 consecutive years of dividend raises. It is as stable as they come. With shares trading around 113 dollars, I bought the 125/130 strikes bear put spread. I’m at the 18DEC2020 expiry which will be in force about 54 days. I have substantial downside protection with an upward move of more than 9.79% required to threaten profits. Any move of that size for DOV is likely to be to the downside in the event of a broad market selloff. I’m positioned to have my spread only become more valuable in that scenario. I got into the spread with $2.45 pricing. The upside is 12% over 54 days or 84% annualized. I have 9 spreads with 4,005 dollars at risk. I fully expect to book a maximum 495 in profits at expiry.

Devour your prey raptors!