Options Trades: GOLD Rolled Over & Out

So …

08/08/2022 12:02:28 Sold 1 GOLD Aug 26 2022 15.0 Put @ 0.15

08/12/2022 09:54:45 Bought 1 GOLD Aug 26 2022 15.0 Put @ 0.05

08/10/2022 14:15:57 Sold 1 GOLD Sep 23 2022 15.0 Put @ 0.32

09/26/2022 Assigned

09/28/2022 11:22:47 Sold 1 GOLD Sep 30 2022 15.0 Call @ 0.13

I STO one contract of GOLD when price was trading around $16.50. Within a few days, it was already trading at 5c.

I rolled it at the same Strike for another 4 weeks. Got assigned due to the rough markets. Now assigned, I STO 1 CALL same Strike for this Friday for 13c (later, I might’ve got 18c or more but I had to go to bed!). It’s now trading at $14.97.

In general PE is low, it’s trading at quite a low valuation and looks like $15.00 or thereabouts is a resistance point. I guessed that it wouldn’t trade long under $15. But macro events are in focus and making things unpredictable. So it dipped to nearly $14.

Errors in Trade.

#1 The initial trade would’ve traded OTM but I rolled it. I opted #2 time to allow assignment seeing that not much had changed.

#2 I rolled it during dividends. It traded under $15, too. Perhaps I shouldn’t have.

#3 I’m going to let it ride till next week. If it’s assigned. ? If not, I’ll STO a contract at $15 for next week (probably).

#4 By rolling the first time I reduced the APR from a respectable 67% to about 24% pa.




Big Dividends : Big Doubts

In our Covered Call Group, members are discussing the selling of contracts of options on the stock ZIM. Let’s look at the issue as far as I can tell.

ZIM Integrated Shipping Services Ltd (NYSE: ZIM currently trading at $48.90) is an Israeli freight services provider with global routes, a long history (running back to 1945), and has made its owners rich.

Therein lies the conundrum: On August 26th, any owners of the stock will be entitled to another massive dividend payment: in fiscal ’22, the stock will pay out nearly $25 ($17 in March +$2.85 in May +$4.75 in September) in dividend payments.

Many members of the group are looking at the juicy dividends and wondering how to take advantage of them. I’m more skeptical! This trade makes no sense to me. Unless I already had stock. Having unintentionally played earnings before, I know how volatile stocks can be.

That to me suggests not strength but business weakness. Pay out divvies because they have nowhere else to invest for a stock that has only traded for 2 years? Is this a tax play by the owners to avoid Israeli cap gains of 30%?

Two articles underline why this is a trade to be avoided in the short term: one is the history of the company. The other is on Seeking Alpha and raises the kind of ZIM Integrated: Is The Near-40% Dividend Yield A Trap? (NYSE:ZIM) | Seeking Alpha! What say you?