Hello Investors,
A few changes to the portfolio today.
Sometimes you have to admit that an investment did not work out. We own 600 shares of VMEO which has been a dog. While we have been able to generate income on the position over time. The prospects for that are now pretty lousy given the low share price. We sold ½ of our position (sold 300 of 600 shares owned). And replaced that with a couple extra shares of Berkshire BRK-B.
Sold 300 shares of VMEO at 3.07 per share
Bought 3 shares of BRK-B at 333.99 per share in its place
In addition to adding a little to our BRK-B stake. We already own 200 shares and only have 1 covered call. So, we added a 1×2 call spread today as follows against the other 100 shares.
Buy to open: BRKB Dec 15th (monthly) 345.00 strike call (ratio of 1)
Sell to open: BRKB Dec 15th (monthly) 355.00 strike call (ratio of 2)
Debit: 0.67
Likely risk = 0.67 or $67.00 per spread
Max reward = 9.33 or $933.00 per spread
Max risk = the stock going too high and either having to buy back this position at a loss or selling our shares at a value of 364.33
We also added a call butterfly in IWM playing for a year-end rally.
Buy to open: IWM Dec 29th (quarterly) 162.00 strike call (ratio of 1)
Sell to open: IWM Dec 29th (quarterly) 172.00 strike call (ratio of 2)
Buy to open: IWM Dec 29th (quarterly) 182.00 strike call (ratio of 1)
Debit: 2.70
Max risk = 2.70 or $270.00 per spread
Max reward = 7.30 or $730.00 per spread
Have a great week!