Small and large dividend stock and ETF investors can use covered calls and puts trades to generate monthly income from options premiums and options trading.
9.7.23. V $245.32. I sold V 9.22.23 (14 days) $232.50 strike puts for $0.49. RoR was 0.2%, 5.2% annualized. Net debit $232.10. Delta -.10, OTM 89.7%, IV 18.24%. With possible UAW strike on auto makers, increasing probability of a rate hike from the Fed and other bearish indicators for the markets, I traded for a 5.2% margin of safety, relatively low RoR and a low risk of having V assigned at the strike. I'd rather buy V at a price below the strike. The 50-day moving average is about $230. On Barchart.com's 13 short term analytics, V was a 100% buy and strengthening.
Analysts rated V a strong buy at 4.68 out of a possible 5. The high target price was $320, the mean was $261 and the low was $88. The StockChart's Technical Rating (SCTR) is a bullish 70 and the relative strength compared with the S&P 500 is a bullish 60.7. The point and figure (PnF) price objective is $286.24.
9.5.23. I own DVN. Today I sold DVN 9.8.23 expiration $54 strike puts for $0.54 when the stock was at $53.99. I goes ex-dividend at $0.49 a share on 9.14.23. This trade lowered my average price and increased my average dividend yield. The three day puts trade which I treat as a 7-day trade because I only do something like this on weeklies, provides a return on risk of about 1%, or about 52% annualized. The ARoR estimate assumes I can do this kind of trade and get similar results 52 times a year, which is unlikely.
After DVN goes ex-dividend, I'll sell out of the money covered calls so I can reduce the risk of DVN being called before it goes ex-dividend in December with what I expect will be a nice increase in the variable part of the dividend.
Analysts rate DVN a "moderate buy" with a 4.2 out of a possible five rating. The highest target price is $79, the mean target is $60.45 and the low target is $50. Based on the current stock price and fixed dividend, DVN yields about 3.63%.
If DVN closes Friday above $54 (50% chance), I pocket the $0.54 a share and sell 9.15.23 puts or I just buy the stock so I can collect the dividend.
9.7.23. V $245.32. I sold V 9.22.23 (14 days) $232.50 strike puts for $0.49. RoR was 0.2%, 5.2% annualized. Net debit $232.10. Delta -.10, OTM 89.7%, IV 18.24%. With possible UAW strike on auto makers, increasing probability of a rate hike from the Fed and other bearish indicators for the markets, I traded for a 5.2% margin of safety, relatively low RoR and a low risk of having V assigned at the strike. I'd rather buy V at a price below the strike. The 50-day moving average is about $230. On Barchart.com's 13 short term analytics, V was a 100% buy and strengthening.
Analysts rated V a strong buy at 4.68 out of a possible 5. The high target price was $320, the mean was $261 and the low was $88. The StockChart's Technical Rating (SCTR) is a bullish 70 and the relative strength compared with the S&P 500 is a bullish 60.7. The point and figure (PnF) price objective is $286.24.
9.5.23. I own DVN. Today I sold DVN 9.8.23 expiration $54 strike puts for $0.54 when the stock was at $53.99. I goes ex-dividend at $0.49 a share on 9.14.23. This trade lowered my average price and increased my average dividend yield. The three day puts trade which I treat as a 7-day trade because I only do something like this on weeklies, provides a return on risk of about 1%, or about 52% annualized. The ARoR estimate assumes I can do this kind of trade and get similar results 52 times a year, which is unlikely.
After DVN goes ex-dividend, I'll sell out of the money covered calls so I can reduce the risk of DVN being called before it goes ex-dividend in December with what I expect will be a nice increase in the variable part of the dividend.
Analysts rate DVN a "moderate buy" with a 4.2 out of a possible five rating. The highest target price is $79, the mean target is $60.45 and the low target is $50. Based on the current stock price and fixed dividend, DVN yields about 3.63%.
If DVN closes Friday above $54 (50% chance), I pocket the $0.54 a share and sell 9.15.23 puts or I just buy the stock so I can collect the dividend.