Today, 8/25/10, I sold 2 KFT Dec10 31 Covered Calls for a net deposit of $92.47 in an IRA account.  My basis for these KFT shares is now 28.40, excluding dividends received.

S&P continues to have a 12 month target of $30 for KFT.  MarketEdge has a price opinion of 30.48 for KFT.  KFT has had a 52 week high of 31.09 and a low of 25.72.  It seems to have a lot of resistance near 31.  Actually, my last two of my last 3 Calls were written at 30 and expired worthless in Dec09 and Jun10.  My most recent Call was written at 31 and expired in August.

It helps that I am in the money on KFT and am now okay if it gets called away at this strike.  However, I would probably try to continue to own the stock to be able to continue collecting the dividends and option premiums.

I originally acquired KFT as a spin off from MO back in 2007.  Since 2009 I have received $406 in total dividends or $2.03 per share in total.  My records do not currently reflect any dividends I may have received prior to 2009.  The dividends are a little more than a 4% annualized yield on my option reduced basis.  Couple the dividends with the option premiums I collect and I am happy to continue owning KFT.