Looking At This Trade: Potential For 267% Annualized

First closed trades.  I had a bull call spread in CHWY going into earnings.  I expected a beat and got it.  CHWY blew out the quarter.  Market apparently was pricing in an even bigger beat as shares sold off almost 10% on the news.  The stock closed below my 50% stop loss so I exited this morning.  I took a 1,010 loss on 2,000 capital at risk over 7 days.

My Annaly (NLY) covered calls finished in the money and shares were called away.  I booked 2,700 in short term capital gains on the sale.

I am back in NLY with short puts at the 7 strike.  I sold 37 contracts on the 16OCT2020 expiry for 14 cents a share.  I have over 5% downside protection in the trade and it is expected to earn 22.12% annualized over 33 days.

I also expanded some of the NLY exposure by getting into Hannon Armstrong (HASI).  This is a company that lends money to companies and utilities for energy conservation and/or green generation capacity.  Most of their loans actually improve the borrower’s credit worthiness due to net savings.  I think the stock is a good long term buy and hold but right now it is a better short term options play.  I sold 6 contracts of the 40 strike put and 16OCT2020 expiry for 1.90 a share.  They trade will be in force for 33 days and yields an expected 52.54% annualized.

I also opened an in the money bull call spread on Coca-Cola (KO). I won’t introduce KO as I think every investor already knows its story.  With shares at 51.06, I bought the 47.5/50 strike BCS with 16OCT2020 expiry.  I paid 1.67 a share net debit for each spread.  Should shares fall less than 2.08% by expiry I collect the maximum profit of 83 cents a share.  That would be good for 996 dollars profit and a 50% return over 33 days or 267% annualized.  I like my chances with downside protection on a solid name.

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