Sold 1 Put on Barrick Gold Stock – 3.18% potential income return in 49 days (23.65% annualized)

On September 1st, 2023, I sold 1 put option on Barrick Gold stock (NYSE:GOLD) with a strike price of $16 and expiry on October 20, 2023. For this trade setup, I was rewarded with $50.95 (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 3 additional shares of GOLD stock itself for our long-term stock portfolio. GOLD is a dividend payer and this latest buy will boost our dividend by $1.02 annually. Not the biggest addition, but every bit counts.

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 OCT 20 '23 16 Put Option 0.52 USD

What happens next?

On the expiry date, October 20, 2023, GOLD is trading above $16 per share -  options expire worthlessly and I keep premium - if GOLD trades under $16 on the expiry date, I risk getting assigned 100 shares, and will have to buy them paying $1,600

As I already have collected a premium of $0.50 per share, my break-even price for this trade is $16-$0.5= $15.5

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: 6 trades since June 15, 2023

• Options premium: $126