BPT distribution and pandemic travel

Spotshooter1983 Updated   
NYSE:BPT   BP Prudhoe Bay Royalty Trust
BPT is part of a two way trade that I like.

I sold the $2.50 September cash secured leap put. This put transacted at the time value of money. Today that cash secured put premium is 45 cents. This puts the downside risk of selling the cash secured option for September at 192 day. I put the cash into GGN which is an oil and gold GAMCO fund with a 10% current yield.

BPT pays no dividend if for any quarter the price of West Texas crude is sub $48 per barrel extracted from this oil royalty trust.

The trust itself is a wasting asset.

With the pending reinstatement of the dividend, I placed a portion of the cash received for other put premiums collected into the trust.

Will BPT continue to have distributions for the next two quarters?

Lets look at the chart and determine where BPT traded when the distribution was discontinued and oil was cheap with pandemic travel related woes.

In the event it is sub $1.90 I will sell a leap call and invest the call premium.

I like my chances.

good trading and all the best.
To correct a mis- statement. I wrote... If it is sub $1.90 I will sell a leap call. I meant to write and a critcal distinction... "If it is put to me and it is sub $1.90 I will sell a leap call." I will only sell the leap call if it is put to me and the price is below $1.90 which will be my cost minus the cash generated with the put premium placed in GGN. GGN earns 10% with the distribution declared by GAMCO for the next three months. Absent a steep decline in oil GGN should hold a value that allows for the distribution to remain stable. Rising oil prices offsetting a gold price decline.
I really should check what I post more carefully. GGN has a distribution of 3 cents per share per month. The distribution is therefore over 10.5% per year. It trades up monthly and today I exited my GGN position at $3.45. I then placed orders to again buy it back lower. thus if put to me BPT will have to be less than $1.85 to have a loss. I am using the BPT cah to buy and sell GGN.
Bought in the September BPT options and sold the same strike for December. Its like a quarterly dividend and reduces the cost if put to me. Net $15 per contract in cash. Alsosold GGN today at $3.67 again using the put ppremium to collect additional cash.
Trade active:
the next monthly puts are posted for the first quarter 2022.
I am going to roll the put vertical that I have. I will look to capture $30 per contract in cash to me on the roll. the cash will go into GGN on the drop after the dividend ex-date last week. this is a 9.5% dividend on the cash received. I have been able to roll these every quarter.

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