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.
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