On October 5, 2020, we sold 3 covered calls on Pennsylvania Real Estate Investment Trust (NYSE:PEI) stock, with a long expiry date in April 16 2021. For this trade, we got a small $15 premium (before commissions)
Pennsylvania Real Estate Investment Trust is a publicly-traded real estate investment trust that invests in shopping centers mostly in the Mid-Atlantic states.
We have been holding PEI stocks in our portfolio since late 2018 or early 2019. Back then PEI was trading around $7 per share and dropping. Today PEI is trading arouund $0.55 per share. As we are holding 300 shares with PEI it was agreed to try and generate at least some income from these trades, so we come up with a plan to sell long expiry options.
This trade comes as the #6 in the month of October, according to our trading plan for this month, the premium generated from this trade makes us about 1.3% from our $600 monthly goal, while in total we have already reached 11.83% so far.
here is our trade setup:
- SLD 3 PEI APR 16 '21 2 Call Option 0.05 USD
As long as the price wont exceed $2 per share we are safe, in case the price for PEI stock rises to $2 and above, our 300 shares will get called away at the strike price of $2