New naked put investment for I'm Loaded Portfolio #2
Sold 60 HPQ May 12-strike naked puts for $40 apiece. Net proceeds after commissions of $2,360. With cash margin maintenance requirements of $9,720, the nominal return for about eight months is 24.3% which is at the pace of 37.3% simple interest for 52 weeks. But with an expected early-out, the likely annualized return will be well into the forties.
If anyone wonders how I'm able to achieve the percentage returns that I do, investments like this is the answer. Imagine receiving annualized rates of return in the FORTIES is HPQ can merely hold its margin-safe price of $13.50 out to May. Earnings growth may not be a ball of fire but EPS this year is still expected to be north of four bucks a share.
09/25/2012 10:43:39 Sold 60 HPQ May 18 2013 12.0 Put @ 0.4