April 9th Option Expiration Results
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(Source)
AbbVie (ABBV) once again was heading higher before it hit a speed bump. Ironically the culprit was Rinvoq and that the FDA extended their review in atopic dermatitis this time. If you asked me what that even is, well, I couldn’t even guess. (Okay, I looked it up and it is eczema according to Google!)
Anyway, it was enough to disrupt the shares just as it seemed like it was heading higher towards our strike price. As we also discussed last time, their dependence on Humira is being worked on through several different drops. It isn’t just Rinvoq - but any little setback makes investors nervous.
(Source - Google Finance)
Black circles above highlight where it was announced that Rinvoq reviews were being extended.
Of course, I expected my luck would be having the shares be called away right before the ex-date. Though if you remember, in the last article before writing the call we knew it was a “risk.” I was willing to take that risk because it was collecting $0.27 per share at $1 over the original price that we got put shares. Thus, it was being “collected” one way or another minus a few pennies.
With that latest $0.27, we bring our total premium collection up to $2.88 on ABBV alone. Not doing too bad! Perhaps just getting lucky that ABBV has been staying in such a tight range lately. Quite honestly, ABBV can be a fairly volatile stock.
(Source - Google Finance)
Black circle highlighting where I’ve started to write options on ABBV, as we can see, ABBV is staying in an unusual range. This has resulted in some lower premiums being collecting but still is working in our favor.
The company’s ex-div date is coming up on 4/14/2021 - next Wednesday! The price will be adjusted by $1.30 and premiums are reflecting that. (Cha-ching for us who are still long!) Even though we’ve been writing calls at the $111 strike and collecting some reasonable premiums around these types of shares prices - the premiums now are pretty poor for that $111 strike - due to that dividend adjustment that will take place. So for now, we will probably go ahead and wait until after Wednesday before revisiting. See where we are at and where the share price is. See if we can collect a reasonable premium!
Realty Income Brief Update
(Source)
For a quick update on the Realty Income (O) position. This one has been going in our favor too! Had I been paying attention and not away from my desk today, I could have closed the put we had for $0.10 it looks like. Remember, we collected $1.16 on that contract. The contract expires on April 16th, so we don’t have all that long. Despite that, why risk another 5 trading days when we could pocket the majority of the cash already. That is what I’ll be looking to do on Monday - barring a complete market collapse.
(Source - Google Finance)
Disclosure: Long ABBV, O
This is not investment advice but for entertainment purposes only. Any decision to buy or sell is solely made by that individual. Speak with a financial professional to develop an investing plan that is right for your own objectives and goals.