Kinder Morgan Inc (KMI)

[Porgie Tirebiter]

I don't understand the attraction of the warrants.

I still treat KMI as a trade. Implied volatility still around 25% which has been tough to find in a relatively safe stock lately. I had been writing strangles for a year and only got called out once and put in twice. The options have been a terrifically bad buy since the last dividend cut - which is why I sell them!

My basis is $7.53 per share giving me a roughly 150% annualized return since early December 2015. Any major league penny player is going to poop all over those numbers but in the little leagues, where I play, that's jacking it out of the park!

I have dialed back the risk by no longer writing puts since the Permian sale doesn't seem to have any legs. I still think without a significant asset sale the dividend remains in danger. I may bail out completely or sell a deep in the money weekly so I get called out before the next earnings announcement. Eliminating the dividend would clobber share price, but would make the shares attractive once again.