I logged into my account this morning and saw NSC was down 7.5%. Norfolk Southern lowered their Q3 earnings and shares were hit hard.
NSC is now trading at my cost basis. Instead of buying more shares, I sold 1 March 16 ’13 $67.50 Put @ 5.17. If assigned I would own 100 shares of NSC at a cost of $62.33/share. This would lower my total cost basis of my 133 shares to $63.71 and increase my YOC to 3.14% from 2.95%.
If the shares are not assigned I keep the premium of $517! This is the largest premium I’ve ever received from selling a put on an individual stock. I still like NSC as a long-term holding and will be happy however this trade turns out.
I’ve updated this trade on my options tab.