Pick good undervalued dividend stocks with active and liquid stock options that can be used to generate weekly and monthly income by selling covered calls and puts options.
DVN $57.40. Sold DVN 9.2.22 $52 strike puts for $1.18. ARoR 30.1%. MOS 9.4%. Delta -.23. Probability of OTM 72%. Would lower my average cost, provide additional dividend income and looks like a good bull play. I'm bullish on energy.
On 5.20.22, I sold CG 8.19.22 (49 days) $25 puts for $0.50 when the stock was $35.89. ARoR was about 11%. Today, I bought back the CG 8.19.22 options for $0.05 11 days before the puts will expire. That upped the ARoR to about 13.7%. The stock is down to $35.36 today on news that the CEO is leaving, apparently because his contract wasn't extended. Rather than risk having the stock drop below $25 and having it assigned, I bought the options back. In a few days, I may roll the puts forward by selling September CG puts.
ABBV $138.87. My cost $165.53. Sold ABBV 8.12.22 $143 covered calls for $0.29. ARoR 9.13% in an IRA. Dividend yield is 3.41% on my cost. Delta .15 means the calls are unlikely to be called on this four-day trade.
DVN $57.40. Sold DVN 9.2.22 $52 strike puts for $1.18. ARoR 30.1%. MOS 9.4%. Delta -.23. Probability of OTM 72%. Would lower my average cost, provide additional dividend income and looks like a good bull play. I'm bullish on energy.
On 5.20.22, I sold CG 8.19.22 (49 days) $25 puts for $0.50 when the stock was $35.89. ARoR was about 11%. Today, I bought back the CG 8.19.22 options for $0.05 11 days before the puts will expire. That upped the ARoR to about 13.7%. The stock is down to $35.36 today on news that the CEO is leaving, apparently because his contract wasn't extended. Rather than risk having the stock drop below $25 and having it assigned, I bought the options back. In a few days, I may roll the puts forward by selling September CG puts.
I'm trying to sell calls on WBA, USB and T, but the market is weakening. So I may wait a day or two for a snap back to get better premium prices.
ABBV $138.87. My cost $165.53. Sold ABBV 8.12.22 $143 covered calls for $0.29. ARoR 9.13% in an IRA. Dividend yield is 3.41% on my cost. Delta .15 means the calls are unlikely to be called on this four-day trade.
Hi Don.
You state, "I sold IWM 8.19.22 $163 puts for $0.40".
My screen is showing .04, not .40
Maybe I am not seeing this correctly?
Hi Patrick. Good catch. I sold IWM 8.12.22 $182 puts for $0.40. AROR 6.9%. MOS 5.5%. Delta -.08.
Thanks.