Rolling Positions BX, EPD

Blackstone (BX) has given me a little trouble since initially entering the trade but is recovering nicely of late. I am writing a covered call that has a strike 50 cents higher than my entry price. As you’ll see, the trade still offers a very good expected annualized return while making room for some capital gains to boost returns. I sold BX190111C00036000 for 63 cents a share. This trade will be in force for 40 days and yields an expected annualized return of 16.19%. That is quite a lot better than the long term average of the S&P (about 9%) and still leaves room for capital gains upside. Should shares be called away at expiry, the annualized return will improve to 29.05%.

Finally, there is Enterprise Products Partners (EPD). I originally purchased shares at 28.69 on 04SEP2018. The underlying has a nice 6.36% annual distribution. Management has provided strong guidance for its future operations due to expanded capacity. The company has been able to grow (mostly) organically without the need for a lot of debt or secondary offerings. The result is a company with a solid balance sheet and great prospects for distribution growth. I’m glad to make a few percent from options while waiting for this company to fulfill its destiny as a cash flow machine.

I have already collected 204 dollars in premiums from writing covered calls above my entry price. I was not able to complete a covered call trade today in EPD at an attractive price. I will content myself with the underlying (growing!) distribution and continue scanning the horizon for opportunities to write covered calls for bonus income.

It is just noise to look at daily returns but I was pleased to see my combined Interactive Broker holdings up by almost 12,000 today. “Good” days in the market can really drive your returns long term.

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