The short term (one to two week expirations) warrants at the $56 strike have had nice premiums on them for the past few months. My profits have allowed me to buy a decent beer (Dale’s Pale Ale).
Yes, the Bud Light scandal has had an impact. Will they recover? Be King of Beers again? Lots of lost market share. And beer drinkers are unhappy.
But they still sponsor advertising at many sporting events. And are probably in every ball park or sports stadium. Lots of clout. Just not forever growing sales.
I took another buy/write position this morning. I bought shares at $56.09 and sold the August 25th $56 for little more than 57 and 1/3 cents. (I did both of these as a single trade on Ameritrade). This puts my net purchase price at about $55.55. I get a great return if the shares are called away in 4 days. I have no idea who is paying these decent premiums for these short term warrants, but I’m happy. My thanx to the drag queen.
Tomorrow I’ll get out the calculator and see if its worth rolling the warrants over to next week. Right now, it looks like a good deal. BUD did just sell off about 8 smaller breweries, and that news didn’t bring the stock price down.