Selling MGM puts for income.
MGM Resorts (MGM) is a natural beneficiary of U.S. travel spending.
The company focuses more on U.S. locations compared to competitors like Wynn and Las Vegas Sands which have more international exposure.
This is helpful in a time when geopolitical tensions are high and covid travel restrictions could still be an issue.
The stock has rebounded sharply from its June lows. A recent short-term pullback gives us a good opportunity to enter a new income play while the overall rebound trend is still very much intact.
By selling the September $32 puts near $1.15, we’re able to collect an annualized yield near 35%, while also giving us roughly $1.70 per share in cushion between the current market price for MGM and our strike price.
- Sell (to open) 2 MGM September 16th $32 puts
- Limit: $1.15 or more
- The new position will represent roughly 7.3% of our model.
- 15:20 Executed
- Sold 2 MGM Sept 16th $32 puts @ $1.16