Discover more from Covered Calls with Reinis Fischer
Sold 1 Put on Barrick Gold Stock – 3.29% potential income return in 43 days (27.89% annualized)
On June 15, 2023, I sold 1 put option on Barrick Gold stock (NYSE:GOLD) with a strike price of $16.5 and expiry on July 28, 2023. For this trade setup, I was rewarded with $54.37 (after commissions).
Barrick Gold Corporation is a mining company that produces gold and copper with 16 operating sites in 13 countries. It is headquartered in Toronto, Ontario, Canada.
From the premium received, I bought 30 shares of TLRY stock for our long-term stock portfolio.
When setting up this trade I was looking for more aggressive, near the money, strike prices, as I’m actually ready for the stock assignment at $44.
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
here is the trade setup:
SLD 1 GOLD JULY 28 '23 16.5 Put Option 0.54 USD
What happens next?
On the expiry date, July 28, 2023, GOLD is trading above $44 per share - options expire worthlessly and I keep premium - if GOLD trades under $16.5 on the expiry date, I risk getting assigned 100 shares, and will have to buy them paying $1,650
As I already have collected a premium of $0.53 per share, my break-even price for this trade is $16.5-$0.53= $15.97
In case of an assignment, I will turn this trade into a wheel strategy and will start selling covered calls.
Anyhow, if troubled with the strike price near the expiry, I will try to roll it forward and down, preferably for credit, before actually taking the stock assignment.
In total: 1 trades since June 15, 2023
Options premium: $54