Replacement investment for the closed-out BAC 2.50's
In the 15% virtually-certain naked put-writing portfolio, I just sold 80 contracts at $26 each of the HPQ 13-strikes expiring in January. Net proceeds after commissions came to $2,030.
Cash margin requiremets are $12,640 resulting in a 16.0% return for 43.6 weeks or at the pace of 19.1% annualized if the $14.60 margin-safe price holds. The stock is currently at $23.50 and hasn't been below $19 in nine years.
It's the worst-performing Dow stock this year which is very much to my liking; I always like to be involved in the Dow's worst stock as that issue is almost always undervalued.
All investments in this portfolio are restricted to 19.9% maximum annualized exluding the positive effects of early get-outs.
However, those early get-outs can dramatically increase the returns. It will be interesting to see just what the return is for a full year with a portfolio of eight diversified unlosable naked put investments. It could easily be over 20%. What a return considering how incredibly safe these investments are.
I have truly discovered the Holy Grail here - the keys to the kingdom and the way to dramatically beat the market.
What I find amazing though is the ongoing pervasive skepticism. I haven't gotten as much as a nibble regarding my offer last week. Are people here really this disinterested in earning these kinds of returns this safely? Why isn't my phone ringing off the hook?