What’s that HUM?

On Tuesday morning while I was starting to get trigger happy as I mentioned a couple of days ago, I turned to thestreet.com and read the summary from Monday’s Mad Money.  I was ready to find something new.  I listed all of Cramer’s bullish picks and only found a couple I considered met my criteria.  Humana (HUM) was one of them.

I entered a limit to sell naked puts when it came back towards its trend lines of higher lows.  Late Friday it hit one of those lines and while trading at $68.44 I sold two April 65 naked puts (HUMPM) and received $428.50 after commissions.  It dropped another dime after that, but ran out of time to fall any more.  I could see it going down to $67 and not breaking its lower trend line.  I’ll still be $2 out of the money there with a good cushion to ride me out of a deeper fall if HUM happens to fall to a 52 week low.  I’m glad I used a limit to get the order below its high from a few days earlier and am further pleased to have more diversification by adding a Healthcare play to my portfolio.

With the end of the month yesterday I received my dividend payout from NPLXX of $96.13.  The interest rate is now less than 3% on this money market that holds my cash I keep in reserves for my naked put writing.  Just a few months ago it was around 5%.  Ah, the good old days.  I paid $2.09 in margin interest for the day I was carrying margin after options assignments. Still, at under 3%, I’ll be taking in an extra $1k+ by keeping that money in a money market rather than just in pure cash.  After March expiration I’d like to have more cash available from stocks being called away, but that’s no certainty.