Market Shadows Virtual Put Writing Portfolio added a new position.
By Paul Price of Market Shadows
Knowles Corp. (KN) was carved out of Dover Corp. (DOV). KN started trading 'regular way' early last week.
The shares had been as high as $32.85 just days ago while trading on a 'when issued' basis. They were offered at just $28.42 early today.
We sold three contracts of the KN Sep. 20, 2014, $30 puts @ $3.30 per share.
Our maximum profit is limited to the $990 we collected upon sale of the put options. If KN closes at $30 or higher on the Sep. 20, 2014 expiration date we will make that full amount without ever having to buy the stock. Until then we must stand ready to purchase 300 shares of Knowles for a net cost of $26.70 ($30 strike price – $3.30 put premium).
That $26.70 per share break-even point is lower than any KN shares have actually changed hands for since the spin-off took place.
Source: Yahoo Finance
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