Today in a taxable account I entered into the following transaction:
02/28/2012 STO 3 WAG Apr 21 2012 31 Puts @.59 164.71
Walgreen's is a Dividend Champion, Dividend Achiever and Dividend Aristocrat. If these puts expire worthless we will earn 11.59% in 53 days on $1421.06 in margin maintenance. This equates to 79.82% annual. If the stock drops below support levels it appears that we can roll down and out for a net credit....and I only roll for a net credit.
Tuesday, February 28, 2012
New Trade: Walgreen's (WAG) Naked Puts
Yesterday in a taxable account I entered into the following transaction:
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
Walgreen's is a Dividend Champion, Achiever and Aristocrat. It has been trading in a narrow range and I took advantage of a drop in price to write these puts. If these expire worthless we will earn 3.64% on $2165.25 in margin maintenance or 69.92% annual. If the stock drops it looks like these puts can be rolled down and out for a net credit.
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
Walgreen's is a Dividend Champion, Achiever and Aristocrat. It has been trading in a narrow range and I took advantage of a drop in price to write these puts. If these expire worthless we will earn 3.64% on $2165.25 in margin maintenance or 69.92% annual. If the stock drops it looks like these puts can be rolled down and out for a net credit.
Saturday, February 18, 2012
Profitable Trade: GDX Covered Call
Yesterday I closed out a GDX Gold Miner's ETF investment in a traditional IRA as follows:
10/25/2011 10:37:57 Bought 100 GDX @ 56.7268 -5,682.67
10/25/2011 10:38:30 Sold 1 GDX Oct 28 2011 56.0 Call @ 1.52 141.23
10/27/2011 10:52:44 Bought 1 GDX Oct 28 2011 56.0 Call @ 3 -310.76
10/27/2011 10:53:06 Sold 1 GDX Nov 19 2011 56.0 Call @ 4.1 399.23
11/10/2011 10:11:02 Bought 1 GDX Nov 19 2011 56.0 Call @ 4.6 -470.76
11/10/2011 10:12:04 Sold 1 GDX Dec 17 2011 56.0 Call @ 5.75 564.22
12/19/2011 10:15:55 Sold 1 GDX Feb 18 2012 56.0 Call @ 1.5 139.20
02/16/2012 13:22:44 Sold 100 GDX @ 54.15 5405.10
I would have written a new call on this transaction, however, the person who I was trading for passed away and my involvement with the account ended as well. In this trade we made $185.10. This equates to 3.42% or 10.95% annual.
It should be noted that before we entered into this trade we actually collected $489.25 in put money which we are not reflecting in these calculations.
10/25/2011 10:37:57 Bought 100 GDX @ 56.7268 -5,682.67
10/25/2011 10:38:30 Sold 1 GDX Oct 28 2011 56.0 Call @ 1.52 141.23
10/27/2011 10:52:44 Bought 1 GDX Oct 28 2011 56.0 Call @ 3 -310.76
10/27/2011 10:53:06 Sold 1 GDX Nov 19 2011 56.0 Call @ 4.1 399.23
11/10/2011 10:11:02 Bought 1 GDX Nov 19 2011 56.0 Call @ 4.6 -470.76
11/10/2011 10:12:04 Sold 1 GDX Dec 17 2011 56.0 Call @ 5.75 564.22
12/19/2011 10:15:55 Sold 1 GDX Feb 18 2012 56.0 Call @ 1.5 139.20
02/16/2012 13:22:44 Sold 100 GDX @ 54.15 5405.10
I would have written a new call on this transaction, however, the person who I was trading for passed away and my involvement with the account ended as well. In this trade we made $185.10. This equates to 3.42% or 10.95% annual.
It should be noted that before we entered into this trade we actually collected $489.25 in put money which we are not reflecting in these calculations.
Profitable Trade: Century Link (CTL) Covered Calls
Today our CTL shares got assignws 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
02/16/2012 Sold 200 CTL @37 7378.01
We made $154.77 in 14 days which is a 2.14% return or 55.8% annual. I would have rolled this position and captured the dividend but I was too busy and couldn't get to it. Anyway, this turns out to be a profitable trade nonetheless.
02/02/2012 Bought 200 CTL @36.81 7371.71
02/02/2012 STO 2 CTL Feb 18 2012 37 Calls @.8 +148.47
02/16/2012 Sold 200 CTL @37 7378.01
We made $154.77 in 14 days which is a 2.14% return or 55.8% annual. I would have rolled this position and captured the dividend but I was too busy and couldn't get to it. Anyway, this turns out to be a profitable trade nonetheless.
Profitable Trade: Coca Cola (KO) Puts
Yesterday the following puts expired worthless in a taxable account:
01/11/2011 STO 4 KO Feb 18 2012 65 Puts @ .51 +190.95
Coca Cola was trading at ~69 at options expiry. The margin maintenance on this trade was $4400. We earned $190.95 in 39 days. This equates to a return on margin of 4.34% or 40.61% annual.
01/11/2011 STO 4 KO Feb 18 2012 65 Puts @ .51 +190.95
Coca Cola was trading at ~69 at options expiry. The margin maintenance on this trade was $4400. We earned $190.95 in 39 days. This equates to a return on margin of 4.34% or 40.61% annual.
Friday, February 17, 2012
Profitable Trade: Conoco Phillips (COP) Covered Calls
Yesterday in a traditional IRA I earned a profit in 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
02/16/2012 Sold 200 COP @ 70 13979.75
We made $295.65 when these shares were assigned. We held the shares for 34 days. Our rate of return was 2.1% which equates to 22.54% annual.
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
02/16/2012 Sold 200 COP @ 70 13979.75
We made $295.65 when these shares were assigned. We held the shares for 34 days. Our rate of return was 2.1% which equates to 22.54% annual.
Saturday, February 11, 2012
New Trade: Pepsico (PEP) Naked Puts
Two days ago in a retiree's taxable account I entered into the following trade:
02/09/2012 STO 3 PEP Apr 21 2012 60 Puts @.54 149.71
I entered into this trade when PEP had tanked down to 64 after it's quarterly report. As stated in my prior post, it has been my experience that when blue chip Dividend Champions release a quarterly report which disappoints it may tank briefly before rising to it's prior price. These were written well below the tank and if put to us the yield on cost will be 3.46% with a dividend rise expected in June. If these puts expire worthless we will earn 5.34% in 73 days on $2800 of margin maintenance which equates to 26.7% annual. If the stock tanks all the way to 60 or below I am confident we can roll the position for a credit.
02/09/2012 STO 3 PEP Apr 21 2012 60 Puts @.54 149.71
I entered into this trade when PEP had tanked down to 64 after it's quarterly report. As stated in my prior post, it has been my experience that when blue chip Dividend Champions release a quarterly report which disappoints it may tank briefly before rising to it's prior price. These were written well below the tank and if put to us the yield on cost will be 3.46% with a dividend rise expected in June. If these puts expire worthless we will earn 5.34% in 73 days on $2800 of margin maintenance which equates to 26.7% annual. If the stock tanks all the way to 60 or below I am confident we can roll the position for a credit.
New Trade: Pepsico (PEP) Naked Puts
A couple of days ago in a taxable account I entered into the following trade:
02/09/2012 STO 2 PEP Mar 17 2012 62.5 Puts @.7 128.51
At the time I entered into this transaction PEP had tanked more than two points down to ~64 based upon it's quarterly report. My experience has been that when a blue chip stalwart tanks after a quarterly report it usually is a knee jerk reaction and it will slowly work it's way back. I wrote the puts under where it tanked and if it tanks more I feel that I will be able to roll the position for a credit and wait for the stock to drift back up. If put to me the yield on cost would be 3.3% with a dividend raise expected in the June quarter. If these puts expire worthless we will earn $128.51 in 38 days on margin maintenance of $2400. This equates to a 5.35% return or 51.4% annual.
02/09/2012 STO 2 PEP Mar 17 2012 62.5 Puts @.7 128.51
At the time I entered into this transaction PEP had tanked more than two points down to ~64 based upon it's quarterly report. My experience has been that when a blue chip stalwart tanks after a quarterly report it usually is a knee jerk reaction and it will slowly work it's way back. I wrote the puts under where it tanked and if it tanks more I feel that I will be able to roll the position for a credit and wait for the stock to drift back up. If put to me the yield on cost would be 3.3% with a dividend raise expected in the June quarter. If these puts expire worthless we will earn $128.51 in 38 days on margin maintenance of $2400. This equates to a 5.35% return or 51.4% annual.
Profitable Trade: SLV Naked Puts
Yesterday in a taxable account I closed out the following transaction for a profit:
01/30/2012 STO 7 SLV Feb 18 2012 30 Puts @.23 145.70
02/10/2012 BTC 7 SLV Feb 18 2012 30 Puts @.05 -35.09
In this trade we made $110.61 in 10 days on a maintenance requirement of $2800.00. This equates to a 3.95% return on margin or 144% annual. I closed out the trade when there was no commission.
01/30/2012 STO 7 SLV Feb 18 2012 30 Puts @.23 145.70
02/10/2012 BTC 7 SLV Feb 18 2012 30 Puts @.05 -35.09
In this trade we made $110.61 in 10 days on a maintenance requirement of $2800.00. This equates to a 3.95% return on margin or 144% annual. I closed out the trade when there was no commission.
Monday, February 6, 2012
Dividend Growth Portfolio Additions
Last week in my Dividend Growth Portfolio I made the following purchases: Century Link (CTL), Coca-Cola (KO) and Realty Income Corp. (O). Unlike many dividend growth investors I choose to reinvest the shares back into the stock that paid the dividend.
Century Link hasn't raised their dividend for over a year so they drop from the Dividend Achievers and Dividend Champions list. I'm not concerned, however, as they recently made some strategic acquisitions including the acquisition of Qwest. The dividend payout ratio is only 50% and the yield is ~7.75%. My money is on a return to dividend growth sometime in 2012 or 2013.
Coca-Cola needs no introduction. I might have bought in on the high end of price but it is due to raise it's dividend next quarter. I will look to add more on dips.
Realty Income is "The Monthly Dividend Company." I've been trading this stock for some time and love it as an enhanced income or double dividend candidate. I also love the monthly dividend and look forward to the compounding effect of that. I will likewise look to buy more on dips.
My Dividend Growth Portfolio is separate and distinct from my income trading accounts. These are my buy and hold retirement accounts. Like many dividend investors I am looking to increase my monthly passive income so that said passive income may fund my retirement years.
Century Link hasn't raised their dividend for over a year so they drop from the Dividend Achievers and Dividend Champions list. I'm not concerned, however, as they recently made some strategic acquisitions including the acquisition of Qwest. The dividend payout ratio is only 50% and the yield is ~7.75%. My money is on a return to dividend growth sometime in 2012 or 2013.
Coca-Cola needs no introduction. I might have bought in on the high end of price but it is due to raise it's dividend next quarter. I will look to add more on dips.
Realty Income is "The Monthly Dividend Company." I've been trading this stock for some time and love it as an enhanced income or double dividend candidate. I also love the monthly dividend and look forward to the compounding effect of that. I will likewise look to buy more on dips.
My Dividend Growth Portfolio is separate and distinct from my income trading accounts. These are my buy and hold retirement accounts. Like many dividend investors I am looking to increase my monthly passive income so that said passive income may fund my retirement years.
Thursday, February 2, 2012
Profitable Trade: GDX Naked Puts
Today in a taxable account I closed the following transaction for a profit:
01/20/2012 STO 4 GDX Feb 18 2012 49 Puts @.57 214.89
02/02/2012 BTC 4 GDX Feb 18 2012 49 Puts @.03 -12.05
In this trade we made $202.84 in 13 days on margin maintenance of ~ $3200.00. This equates to a return of 6.34% or 178% annual. I could have waited for these puts to expire worthless but we had drained most of the profit out of the trade and there was no commission at exit. I'm going to be looking for other, more profitable opportunities in this account.
01/20/2012 STO 4 GDX Feb 18 2012 49 Puts @.57 214.89
02/02/2012 BTC 4 GDX Feb 18 2012 49 Puts @.03 -12.05
In this trade we made $202.84 in 13 days on margin maintenance of ~ $3200.00. This equates to a return of 6.34% or 178% annual. I could have waited for these puts to expire worthless but we had drained most of the profit out of the trade and there was no commission at exit. I'm going to be looking for other, more profitable opportunities in this account.
New Trade: Century Link (CTL) Covered Calls
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.
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.
New Trade: Sold SLV Naked Puts
A couple of days ago I entered into the following transaction in a taxable account:
01/30/2012 STO 7 SLV Feb 18 2012 30 Puts @.23 145.70
It looks like the precious metals bottomed ~ three weeks ago. SLV has been north of 30 and rising for some time. If it drops SLV has provided good opportunities to roll out to the next month and down a strike for a net credit. As such, we have an additional exit strategy in place. If I hadn't been dealing with a family emergency I probably would have been a tad more patient and waited for SLV to drop a bit and written the less risky 29's for a little less return. I didn't have that luxury but I wanted to put time decay to work while I was out of town. If these puts expire worthless we will earn $145.70 in 18 days on $2800 margin maintenance (which is free BTW). This equates to a 5.2% return or 105.44% annual.
01/30/2012 STO 7 SLV Feb 18 2012 30 Puts @.23 145.70
It looks like the precious metals bottomed ~ three weeks ago. SLV has been north of 30 and rising for some time. If it drops SLV has provided good opportunities to roll out to the next month and down a strike for a net credit. As such, we have an additional exit strategy in place. If I hadn't been dealing with a family emergency I probably would have been a tad more patient and waited for SLV to drop a bit and written the less risky 29's for a little less return. I didn't have that luxury but I wanted to put time decay to work while I was out of town. If these puts expire worthless we will earn $145.70 in 18 days on $2800 margin maintenance (which is free BTW). This equates to a 5.2% return or 105.44% annual.
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