September Puts Options Trades Update #4
By Donald E. L. Johnson
Cautious Speculator
- September's options premiums return on risk on cash secured puts sales will be about 14.6%.
- Four of the 18 trade look like they will be assigned.
- After the stocks and ETFs are assigned, I’ll sell covered calls on them.
September’s 16 cash secured puts trades on 18 stocks will return about a 14.6% return on risk.
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Since Update #3, the Visa Inc. (V) 9.22.23 puts expired and I sold V 9.29.23 $235 puts.
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On Friday, V closed at $235.08 and it may be assigned this week. It was at $244.36 on 9.22.23 when I sold the latest puts. Analysts rate V a strong buy with a 4.68 out of a possible 5 rating. The high target price for V is $320. The mean target price is $261 and the lowest target price is $88. It is a 56% buy on Barchart.com.
On Valuentum.com, the fair value estimate for V is $236. On Morningstar.com, the FVE is $241. On Stockchart.com, the bullish point and figure chart price objective is $286. If V is assigned, I’ll take the assignment and sell covered calls on the stock for options premiums income.
The September puts on the S&P Biotech SPDR ETF (XBI) and the September puts on the S&P 500 Consumer Discretionary Sector SPDR ETF (XLY) also look like they will be assigned. On Friday XBI closed at $72.96 a share, and XLY closed at $160.93. I’ll probably take assignments on those stocks and sell covered calls on them next week.
The month’s biggest disappointment is Data General Corp. (DG) . When I sold DG 9.29.23 expiration $25 puts, the stock was at $129.62 a share. On Friday, it closed at $108.14 after it reported disappoint earnings. DG has gone from being seen as a top discount retailer to one of the weakest retailers because its target customers are relatively low income, and they are being hit hard by the inflation tax. DG is down 32.35% in the last month and 56% year to date. With DG’s relative strength at 14.8, it looks very over sold.
On Barchart.com, DG is a strong 100% sell. Analysts give DG a moderate buy rating of 3.41. The high target price for DG is an optimistic $270, which probably will be reduced. The mean target price is a still optimistic $152.76, and the low target is $96. That also could be optimistic in this market.
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September Puts Options Trades Update #2
September Puts Options Trades Update #1
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A video on how to place options trades on TDAmeritrade.com’s Think or Swim trading platform.
On the date of publication, Donald E.L. Johnson had a position in: V, XBI, XLY, DG. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
