Yet another covered call: Simon Property Group: REIT Mall

I sold Jan 24 $100 Covered call, including dividends, you get 11.14% annualized return with 25% downside protection; Remember you get $7.2 in dividend include that in your return calculation. Generally I like to get closer to 15% return but I did this in IRA account so no taxes to worry about. Also, I like to get some more downside protection. So not necessarily an optimal trade setup.

I messed up the date of the execution. I should have waited for the earnings. It could have slightly juiced up the yield. :joy:

Guidance for 2023: EPS $6.35 to $6.6; FFO $11.7 to $11.95; So if assigned FFO yield will be 8.3.

So far so good. Current stock price provides 15% downside protection, in the meantime SPG increased the dividend by 5 cents so I will collect two more dividends of $1.85 each. Still will provide 10% return, not great given SPY performance YTD; But something I have settled for, so okay.


Today is the ex-dividend date and the stock was called, meaning I will miss the final dividend. The stock moved up from recent low’s and the bid-ask is so wide, I could not rotate it. The stock is flattish and I am not super excited about mall REIT’s. So didn’t work hard to rotate it. OTOH, I think REIT’s will do better in 2024, due to falling inflation, and interest rates. But have to choose the right sub-sector or stocks. I think stock picking is back!!!

Net-Net, including dividends it is 8.8% simple return or 10.65% annualized yield. Nothing earth shattering but singles like this provide some anchor to the portfolio.

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