EPD is basically the income workhorse in this portfolio - I'm not really looking for price movement with this one, just the yield. That's why I've got it marked with 0% potential upside. The identical buy/trim points are basically my way of saying "this is purely a yield play." If it's under $32, grab it for the income. If it starts pushing above $32, the yield-to-risk ratio gets less attractive, so you might want to rotate that cash elsewhere in the strategy.
- Sell a cash-secured put on the tanker/refiner I like. Either I pocket the premium or I’m happily assigned shares at the sanction discount.
- If I do get the shares, I flip around and sell a covered call 5-7 % above my cost, 30–45 DTE. That’s fresh income while I wait for the next dividend.
Called away? Perfect.
I’ve been paid on the way in and on the way out.
Then I reload with a new put and keep the wheel spinning.
Not called - not a big deal—I keep the call cash (and the dividend), then write a new call when the old one expires.
Motley Fool loves the toll-bridge stocks, I just squeeze extra rent out of them in both directions :-)
Thanks for yet another winning strategy! Great insightful breakdown of how to navigate disruptions in traditional trade and capitalize on shifting market dynamics. Your guidance on the methodology for identifying key opportunities amidst uncertainty is invaluable.
I was revisiting this post. I see you have EPD as buy under $32 and Trim above $32
Yep, the $32/$32 for EPD is actually intentional
EPD is basically the income workhorse in this portfolio - I'm not really looking for price movement with this one, just the yield. That's why I've got it marked with 0% potential upside. The identical buy/trim points are basically my way of saying "this is purely a yield play." If it's under $32, grab it for the income. If it starts pushing above $32, the yield-to-risk ratio gets less attractive, so you might want to rotate that cash elsewhere in the strategy.
Motley Fool always talks about the picks and shovels. What about selling calls and CSP’s if the stock is called away?
Here's my thought process
- Sell a cash-secured put on the tanker/refiner I like. Either I pocket the premium or I’m happily assigned shares at the sanction discount.
- If I do get the shares, I flip around and sell a covered call 5-7 % above my cost, 30–45 DTE. That’s fresh income while I wait for the next dividend.
Called away? Perfect.
I’ve been paid on the way in and on the way out.
Then I reload with a new put and keep the wheel spinning.
Not called - not a big deal—I keep the call cash (and the dividend), then write a new call when the old one expires.
Motley Fool loves the toll-bridge stocks, I just squeeze extra rent out of them in both directions :-)
Thanks for yet another winning strategy! Great insightful breakdown of how to navigate disruptions in traditional trade and capitalize on shifting market dynamics. Your guidance on the methodology for identifying key opportunities amidst uncertainty is invaluable.
Thanks PK! Much appreciated! Markets tend to go crazy during transitions, but there's usually gold hidden in there if you know where to look :-)