On 1/26/10, I sold 2 MO Feb10 20 Puts for a net deposit of $58.46 in an IRA account.  If Put to me my basis for these MO shares would be 19.71.

I already own 200 shares of MO with existing Covered Calls at the 20 strike on them expiring in Jan11.  My basis on those shares is 35.48, excluding dividends received.  MO currently pays a .34 quarterly dividend which is about a 7% annual yield.

If I am put these new shares I would greatly average down the basis on my total MO holdings.  I consider MO to be one of my core holdings and look to accumulate at these lower prices so will probably allow these shares to be Put to me.