Selling Naked Put Options on Diana Shipping Inc. (DSX)

Jim Cramer’s Mad Money show headlined dry shipping companies last night.  I took a deeper look at four of them that he mentioned: PRGN, OCNF, GNK and DSX.  The first two don’t trade options so I stopped there.  The latter two are optionable and both offer fairly “rich” premiums.  Of course these are the ones he labeled as riskier than the other two.  PRGN and DSX were his favorites.

I made a list comparing GNK and DSX.  Not to spoil the suspense, but DSX won because it already has December options trading and that’s my focus for the next few weeks.  Also aiding DSX’s victory, in my opinion, was their dividend yield of nearly 6% versus just under 4% for GNK.  Both seemed to be in the middle of their trading ranges that are trending up and both showed a potential support level more than $7 below their current prices, but $7 on the lower priced DSX makes a much bigger percentage cushion. While DSX was trading at 36.20, I sold four December 30 naked puts (DSXXF) and received $567.00 after commissions.  If you are not reading this post on www.mytradersjournal.com you are reading it from a site that has plagiarized it.  

Another plus for both companies is the massive amount of international exposure they have.  With the weak dollar, that becomes a key piece to this trade.  Throw in the fact that DSX is based in Greece and it gives me an added incentive since all things Greek are great.