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.
9.13.23. DHI $113.65. Cost $120. Net Debit $117.35. I sold DHI 9.29.23 (16 days) $120 strike covered calls for $0.75. New cumulative net debit $116.60. Delta .20, OTM probability 81.2%. Implied volatility 32.4%. On Barchart.com DHI was a weak 8% buy. Wall Street analysts rate DHI a moderate buy with an average rating of 3.94 out of a possible 5. The highest target price was $167, the mean was $144.19 and the low TP was $98. P/FCF ratio was 12.2. PE ratio was 8.1. Debt/Equity ratio was 0.3. Dividend coverage ratio was 14.5. Relative strength was a barely bullish 40.1. Point and figure chart bearish price objective was $107.15.
9.5.23. I have decide to not sell covered calls on CAG. I bought it in May at $35.76. After collecting covered calls premiums and one dividend, the net debit is $34.51. CG 9.29.23 $31 strike (24 days, up 5.2% from current 52-week low price of $29.41, delta .16, OTM probability .85) call option price is only $0.10. That would provide a 0.28% return on risk or 4.25% annualized. At the net debit price, my dividend yield is 4.1%. I'm waiting for the stock to rally before selling calls. Analysts rate CAG a moderate buy at 3.67 out of a possible 5. The highest target price is $42, Mean is $38.09 and Low is $30. The bearish point and figure price objective is $35, and CAG is trading well below that.
9.13.23. DHI $113.65. Cost $120. Net Debit $117.35. I sold DHI 9.29.23 (16 days) $120 strike covered calls for $0.75. New cumulative net debit $116.60. Delta .20, OTM probability 81.2%. Implied volatility 32.4%. On Barchart.com DHI was a weak 8% buy. Wall Street analysts rate DHI a moderate buy with an average rating of 3.94 out of a possible 5. The highest target price was $167, the mean was $144.19 and the low TP was $98. P/FCF ratio was 12.2. PE ratio was 8.1. Debt/Equity ratio was 0.3. Dividend coverage ratio was 14.5. Relative strength was a barely bullish 40.1. Point and figure chart bearish price objective was $107.15.
9.5.23. I have decide to not sell covered calls on CAG. I bought it in May at $35.76. After collecting covered calls premiums and one dividend, the net debit is $34.51. CG 9.29.23 $31 strike (24 days, up 5.2% from current 52-week low price of $29.41, delta .16, OTM probability .85) call option price is only $0.10. That would provide a 0.28% return on risk or 4.25% annualized. At the net debit price, my dividend yield is 4.1%. I'm waiting for the stock to rally before selling calls. Analysts rate CAG a moderate buy at 3.67 out of a possible 5. The highest target price is $42, Mean is $38.09 and Low is $30. The bearish point and figure price objective is $35, and CAG is trading well below that.