Traders Cooperative

[Joe Stocks]

I do a fair amount of trading. Probably over 3,000 trades a year over 14 accounts that I manage for myself and others. Most a manage conservatively. I would say "aggressively conservatively!" lol!

Today I bought shares of ENLC. They reduced their dividend last night. Shares are up today as the reduction was anticipated, and not as bad as thought. ENLC is a midstream MLP.

I also did a covered call. Bought the stock at $5.97 (2000 shares)

I sold the February 6's for .35 (20 of them)

If taken out Feb 21st at $6 I will receive and will have received;
.03 PPS appreciation
.35 Option premium
.19 declared dividend
.57 total

My cost basis is 5.97 less option premium credit of .35 = 5.62
If taken out at $6 in 37 days I will have a return of 10.1%.

I feel pretty good about this trade. ENLC now has a dividend yield of 12.5% (.75 annually). The anticipated bad news is out. Dividend coverage is now near 2X. The yield and coverage I think will help put a floor under the current PPS.

https://finance.yahoo.com/news/enlink-midstream-announces-2020-financial-220400111.html