Monday Trades With Yields Up To 1400%

Shifting exposure away from NLY.

music selection:  “Paschendale” — Iron Maiden

weigh-in:  210.0 +0.4

Annaly (NLY) puts have treated me well. I went BIG with those earlier. I still think the company is a screaming buy up to $7.00. But I want better diversification. And I also want some leveraged exposure to gold while the Fed embarks on unprecedented (and reckless) balance expansion at a rate never before imagined.

I sold two contracts of GDXJ200515P00042000 for 1.93 a share. This gives me exposure to the Junior Gold Miners index. These companies are mostly early-stage miners that haven’t started operating their mines yet. They have “gold in the ground” and can advance at high multiples to the upside in the underlying commodity. The trade will be in force for 12 days and yields an expected 139.77%

After adding 8,400 dollars in exposure to gold, I took a similar amount of exposure off the table from NLY. I bought to close 14 contracts of NLY200515P00006000 for 25 cents a share. I previously sold the contracts on 20APR2020 for 54 cents a share. I realized 406 in profit 8,400 capital at risk over 14 days. That results in an annualized gain of 1400%.

Assuming I don’t close any more long-dated puts (hedges) May will clock in at 4,378 in options premiums earned. A pretty good month.

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