Today with CTL down over 2% I entered into the following trade in a traditional IRA:
02/02/2012 Bought 200 CTL @36.81 7371.71
02/02/2012 STO 2 CTL Feb 18 2012 37 Calls @.8 -148.47
This particular account is for a retiree family member. Century Link was a Dividend Achiever and a Dividend Champion before it froze it's dividend at .725/share. The yield is a whopping 7.73%. CTL goes ex-dividend February 16th and has an earnings report February 15th. I didn't shy away from buying before an earnings report because this is a stock we want to hold long term in this particular portfolio and this increased the income on the calls we wrote since we get paid for volatility.
Our out of pocket is $7223.24 or $36.11 per share. Assuming we don't get called away we will also receive the dividend of $145 which will lower our out of pocket to $7078.24 or $35.39/share. We can also write new calls in two and a half weeks to lower our out of pocket even more. If we do get called away (and don't roll the position) it is still a nice return. I like the setup on this one very much for an enhanced income strategy.
Showing posts with label ex-dividend. Show all posts
Showing posts with label ex-dividend. Show all posts
Thursday, February 2, 2012
Monday, January 30, 2012
Trade Continuation: Conoco-Phillips (COP) Covered Calls
Today in a traditional IRA I continued the following transaction:
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
01/30/2012 STO 2 COP Feb 18 2012 70 Calls @.58 +104.47
Our January calls expired worthless so I wrote new calls. Due to a family emergency it will be hard to trade weekly options so I wrote these 19 days out. This lowers our out of pocket to $13684.10 or $68.42/share. COP goes ex-dividend on Feb. 17 so if the stock price rises above 70 I may roll the position to make sure I collect the dividend. The dividend will most likely rise this quarter.
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
01/30/2012 STO 2 COP Feb 18 2012 70 Calls @.58 +104.47
Our January calls expired worthless so I wrote new calls. Due to a family emergency it will be hard to trade weekly options so I wrote these 19 days out. This lowers our out of pocket to $13684.10 or $68.42/share. COP goes ex-dividend on Feb. 17 so if the stock price rises above 70 I may roll the position to make sure I collect the dividend. The dividend will most likely rise this quarter.
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