Hello Investors,
Today we discussed the idea of “risk free rate of return”. While there is “risk” in all assets. U.S. Govt bonds are considered “risk free” and thus every bond in the market uses it as a benchmark. Then the comparison game begins as investors analyze what they can get from a Govt bond versus something with a larger risk profile like corporate bonds. Finally. that leads us to the idea of whether or not the Fed will eventually be a stock buyer. It is one step further and is very likely coming in the years ahead!
We bought 83 shares of LB at 16.45 to cover our short call and leave us in a small core position.
We also bought a 1×2 put spread in EFA. This is a broken wing butterfly with a nice probability profile. We collected a +0.04 credit for that trade.
Have a great week!
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