Selling VALE puts for income.
VALE S.A. (VALE) is the world’s largest iron ore miner and the company also produces many other important resources.
As inflation pushes commodity prices higher, VALE should be a natural beneficiary. the stock has trended higher for the last several months, and a short-term pullback this week gives us a chance to set up an attractive income play.
By selling the May $19 puts near $0.65, we’re able to collect an annualized yield near 34%, while also giving us roughly $0.80 per share in cushion between the current market price for VALE and our strike price.
- Sell (to open) 3 VALE May 20th $19 puts
- Limit: $0.65 or more
- The new position will represent roughly 5.8% of our model.
~~~~~~ - 12:19 Executed
- Sold 3 VALE May 20th $19 Puts @ $0.66