I've owned KMI on and off for 11 or 12 years. When it cut its dividend, I got out at the top and bought back in near the bottom and had KMI called along the way. I'm a bit under water based on my average purchase price, but because I've been collecting dividends and premiums from selling covered calls for a long time, my net debit is well below the current price.
Net debit equals average purchase price minus collected dividends and options premiums.
At the moment, I'm not writing covered calls or selling puts on KMI. The stock isn't very volatile so the prices of KMI's puts and calls are too low to take the risk of having the stock called in my IRA. And I own as much of the stock as I want.
If I didn't own the stock, I would be selling $15 and $16 cash secured puts on it in the hope that the stock would dip to those levels and let me buy at the discounted prices, or strikes.
Note: On the far right side of the spread sheet the Trades column shows the number of trades per year to get the estimated annualized returns in the Annual RoR column.
Net debit is the purchase price of the equity less collected dividends and cumulative options premiums that have been earned over several months and years.
On Bloomberg TV, a top strategist from Wells Fargo's brokerage firm was very bullish on energy equities that pay good dividends. I'm in DVN, XOM, KMI and PSX. They all pay good dividends and are in good energy subsections. Except for KMI, they're all good covered calls and cash secured puts trades.
@Brewmeister. Thanks. Are you doing any of these trades? Or are you waiting to buy the stocks at lower prices before you sell calls or cash secured puts?
Steven Fiorello has a bullish writeup on Kinder Morgan (KMI). https://seekingalpha.com/article/4612940-kinder-morgan-to-benefit-from-natural-gas-production-yields-6-78-percent?mailingid=31880622&messageid=2850&serial=31880622.20508&utm_campaign=rta-author-article&utm_medium=email&utm_source=seeking_alpha&utm_term=31880622.20508
I've owned KMI on and off for 11 or 12 years. When it cut its dividend, I got out at the top and bought back in near the bottom and had KMI called along the way. I'm a bit under water based on my average purchase price, but because I've been collecting dividends and premiums from selling covered calls for a long time, my net debit is well below the current price.
Net debit equals average purchase price minus collected dividends and options premiums.
At the moment, I'm not writing covered calls or selling puts on KMI. The stock isn't very volatile so the prices of KMI's puts and calls are too low to take the risk of having the stock called in my IRA. And I own as much of the stock as I want.
If I didn't own the stock, I would be selling $15 and $16 cash secured puts on it in the hope that the stock would dip to those levels and let me buy at the discounted prices, or strikes.
Callum Turcan has a bullish writeup on XOM. Link: https://seekingalpha.com/article/4612323-why-exxon-mobil-stellar-dividend-growth-idea .
Note: On the far right side of the spread sheet the Trades column shows the number of trades per year to get the estimated annualized returns in the Annual RoR column.
Net debit is the purchase price of the equity less collected dividends and cumulative options premiums that have been earned over several months and years.
On Bloomberg TV, a top strategist from Wells Fargo's brokerage firm was very bullish on energy equities that pay good dividends. I'm in DVN, XOM, KMI and PSX. They all pay good dividends and are in good energy subsections. Except for KMI, they're all good covered calls and cash secured puts trades.
Thanks Donald...very well said in laymen’s terms!
@Brewmeister. Thanks. Are you doing any of these trades? Or are you waiting to buy the stocks at lower prices before you sell calls or cash secured puts?