Easing Back In With DSX Naked Puts

DSX is so volatile that I figured it would drop again some, but the premium for the April 25 was so high already that I didn’t want to miss out if it stabalized or even just went up a little more. The bid/ask was around .85 yesterday and I put my order in to sell at 1.00. In pre-market I saw DSX was edging down with the rest of the market and raised my limit to 1.10.

Within two minutes of the market opening, my order hit and while DSX was near its low of the day. I sold four April 25 naked puts (DSXPE) and received $427.00 including commissions. That was at 1.10 per option. It traded as high as 1.30, but closed the day at .85.

I’m trying not to sell more than one set of options per day so I don’t pile in on the worst possible day if we have another big drop. I’d like to keep some cash available for just such a fall.

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Comments (2)

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2 Comments

Comment by Options Strategery

Couldn’t find any interesting opportunities in the market so was doing some due dilligence on DSX. Found this article at ZachStocks. He specifically mentions DSX and dry shippers as risky.

Has your outlook changed? I couldn’t find a recent pitch on DSX, only the real old post about Cramer mentioning it.

The premiums look a bit low to me but I don’t know much about DSX.
Comment by Alex Fotopoulos

DSX has some long term contracts that will keep the cash rolling in. They have a forward p/e of 11.54 and a PEG of only .56. That points to a higher future to me. Throw in that support held recently and I figured it was a fairly safe play, for a “risky” stock. Getting $1.10 while $4+ OTM is certainly good.