August Covered Calls Options Trades Yielded 14.6% In Options Premiums

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.

By Donald E. L. Johnson

Cautious Speculator

• Average annualized options premiums returns on August covered calls trades totaled 14.61% up from 9.97% in July and a bit higher than the year-to-date returns of 14.48%.

• Total returns were increased 53.3% by dividends collected during August. Net realized capital gains increased the month’s total income another 17.2% over the options premiums income.

• The 14 stocks’ and one ETF’s average annual dividend yields are about 3.75%.

• MRK and QQQ covered calls were exercised.

August covered calls trades on dividend stocks and one ETF generated and average of 0.5% options premiums returns, or 14.61% annualized.

Annual dividend yields on the 14stocks and a ETF averaged another 3.32%. Call options premiums plus dividends were a potential 17.93% annualized. Annual RoR assumes that the same results can be realized every month during the next 12 months.

Please click on the image and zoom in for a better view.

During August, there were 17 covered calls trades on 14 stocks and one ETF.

My year to date annualize covered calls options premium returns are averaging 14.48%. Premiums plus dividends annualized are averaging about 17.8%. Year to date, I’ve done 108 covered calls trades on 66 stocks. Educational articles about those trades and the risks involved in doing such trades are on the home page.

Merck & Co. (MRK) and Nasdaq QQQ Invesco ETF (QQQ) were called. I did two covered calls trades on each of them.

In addition to MRK and QQQ, I did covered calls trades on The Carlyle Group (CG), Cisco Systems (CSCO), Dow Inc. (DOW), Devon Energy Corp. (DVN), Kinder Morgan (KMI), Kroger Co. (KR), Newmont Mining Corp. (NEM), Pfizer Inc. (PFE), Proctor & Gamble Co. (PG), J.M. Smucker (SJM), Southern Co. (SO) and Exxon Mobil Corp. (XOM). I also collected money market monthly interest income and dividends on other investments.

Between my weekly portfolio updates, I report my thoughts and trades in the comments section of this and other posts. When I do trades, I post reports in the comments section on the most recently published articles.

Several months of collecting puts and calls on MRK reduced the net debit to $108.24 per share. That left me with a $0.24 per share loss on the MRK trade. On Friday, I sold MRK 9.29.23 expiration puts for $1.66 a share. MRK closed Friday at $110.21.

Selling QQQ puts and calls reduced QQQ’s net debit to $360.40. It was called at $362, giving me a $1.60 a share profit. On Friday, QQQ closed at $364.02.

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Beware. Like all investing, trading stocks and options is risky. I’m an active private speculator who trades covered calls and sells puts on stocks for my accounts. I am not a professional analyst nor a financial advisor. I don't take and won't take responsibility for how other people trade. This article is for educational purposes only. It is not advice. The data presented looked accurate at publication time except for intra-day fluctuations, but I can’t guarantee the accuracy. Traders should do their due diligence. I reserve the right to trade any of the listed stocks and options at any time. I receive no compensation for producing this content nor for any links.