Profitable Trade: AT&T Covered Calls

Today in a traditional IRA our shares of AT&T were assigned so that the investor on the other side could capture the dividend. The entire set of transactions looks like this:

06/27/2011    Bought 200 T @ 30.889                                      -6187.79
06/27/2011    STO 2 Aug 20 2011 31 Calls @.53                       +94.50
08/01/2011    Dividend                                                           +86.00
08/03/2011    BTC 2 Aug 20 2011 31 Calls@.05                        -10.00
08/03/2011    STO 2 Jan 21 2012 31 Calls@.66                      +120.50
11/01/2011    Dividend                                                           +86.00
11/22/2011    BTC 2 Jan 21 2012 31 Calls@.05                       -10.00
12/02/2011    STO 2 Dec 17 2011 29 Calls@.38                      +64.47
12/19/2011    STO 2 Feb 18 2012 29 Calls@.59                     +106.47
01/06/2012    Sold 200 T @ 29                                             +5779.89

We made $130.04 in this series of of transactions. This equates to ~ 2.2% or ~4.1% annual. We're fine with this as we probably paid too much to enter the position and it was sitting there as dead money waiting for the dividend. I thought in December when the T-Mobile deal was falling through that the price would stay below 29. Oh well, I'll enter this position again at my price through the selling of puts. In this particular account we are sitting on a ton of cash, waiting for the next downturn to enter new positions.

Even though the profit on this was small, a profit still it was. I guessed wrong a couple of times but still pulled in enough income to pull a profit.