Selling CLF puts for income.
Cleveland Cliffs is an iron ore and steel company that should benefit from a rebound in U.S. manufacturing. The stock pulled back as investors worried about the new coronavirus variant. But manufacturing in the U.S. should remain strong.
Thanks to higher levels of fear in the market, we’re able to collect income that gives us more than 40% of potential annualized yield, while still using a put contract that gives us nearly $2.00 per share of cushion between the current market price and our strike price.
- Sell (to open) 4 CLF January 21st $18 puts
- Limit: $1.00 or more
- The new position will represent roughly 7.7% of our model.
- 11:08 Executed
- Sold 4 CLF Jan 21st $18 Puts @ $1.06