Capitulate MMM

Yesterday, my bull call spread in MMM went from fully in the money to threatened.  I woke up this morning to a meaningful decline in price that move the spread fully out of the money.  With expiration coming tomorrow, this savaged the remaining time value.  I had to sell for 49 cents a share.  I booked a 4,392 short term loss over 39 days.  Total losses for the month will now be over 13,000 and my year to date trading gains will be narrowly negative.  Worse, my positions expiring next month are threatened.

I bought 100 shares of CNP-PB.  These are rights to preferred shares that have a mandatory conversion to equity on September 1st.  The conversion rate is variable based on the share price of the underlying equity.  The shares are currently between the lower and upper bound and should be worth 50 dollars a piece if things remain stable (as they should for this regulated utility.  I bought for 46.87.  With a distribution of 88 cents coming and conversion at 50, the annualized return should be around 18%.

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