My Cash Flow Trade

I sold the $57 put on OXY with the 8/30 expiration date for $0.48 in premium. This is a one week trade, so I’m risking $5,700 (on the chance I’ll be assigned the shares) to make $48. This is a one week long trade, so in theory I could do this or a similar trade 52 times in a year. When I divide the $0.48 in premium into the $57 strike I get 0.0084, and when I multiply that by 52 weeks in a year I get 43.8. That’s an annualized return of 48%. I’m happy to own OXY at $57 per share because Buffett has been buying shares in the mid to upper $50’s over the last year, so it’s likely he’ll step in and buy more shares if it drops much from here. OXY also goes ex-dividend on 9/10, so if I get assigned I’ll collect the dividend, then sell a covered call at that same $57 strike. If I get called away at that same strike I’ll have made money on the premium for the put, the dividend, and the premium for the covered call. Here’s more detail.