BAC roll the put vertical - over and over
BAC has large reserves that will continue roll out to the bottom line as the bank exceeds the capital requirement of the stress test.
BAC has a very large stock buyback in place and will use a substantial amount of this money to support the stock price and the buyback.
Buffett received permission to increase ownership to 15% of the BAC common stock without Berkshire being considered a bank with holding company. This alone implies that 15% of the common is not traded - an older Buffett idea not generally adhered to by the current portfolio managers at BERK.
BAC raised the dividend this quarter.
Indicators are positive.
Absent a decline in RSP and SPY the position continues to pay with an at the money cash secured put and a standard deviation lower put.
Here is the trade... Sell the August 20 $41 strike put for $1.95 and buy the August 20 $36 strike put for $0.22. Net gain of $1.75 at the close Friday.
I will roll it again in 21 days.
BAC has a very large stock buyback in place and will use a substantial amount of this money to support the stock price and the buyback.
Buffett received permission to increase ownership to 15% of the BAC common stock without Berkshire being considered a bank with holding company. This alone implies that 15% of the common is not traded - an older Buffett idea not generally adhered to by the current portfolio managers at BERK.
BAC raised the dividend this quarter.
Indicators are positive.
Absent a decline in RSP and SPY the position continues to pay with an at the money cash secured put and a standard deviation lower put.
Here is the trade... Sell the August 20 $41 strike put for $1.95 and buy the August 20 $36 strike put for $0.22. Net gain of $1.75 at the close Friday.
I will roll it again in 21 days.
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