Yesterday, Feb 23, 2010, I bought 200 shares of VZ at a net of 28.80 per share.  I then sold s VZ Apr10 30 Covered Calls for a net deposit of $36.46 in an IRA account.  My basis for these VZ shares is now 28.62.

I have owned VZ in the past, sold Calls on it and had it called away at a profit.  I should probably have gone back to VZ earlier because it is a stock that fits well into my core investing goals.  It pays a good dividend, currently about 6.61% and allows me to increase my yield through selling Covered Calls and possibly through the stock being called away at a level above my purchase price.

VZ, along with T,  is a stock that Jim Cramer identifies in his latest book “Getting Back to Even” as one that is a good stock to own in a diversified dividend producing portfolio.  Jim recently had the CEO of VZ on his show where they talked about the continued safety of the dividend payments.  There have also been several purchases by VZ insiders.

Today, Feb 23, 2010, I sold 3 ZQK Mar10 2.50 Covered Calls for a net deposit of $17.71 in my taxable account.  My basis for these ZQK shares is now 9.97.

ZQK was trading around 2.35 when I sold these Calls.  Then, late in the day, it jumped up to close at 2.50.  I don’t see any news but there must be something out there.

I have been disappointed with ZQK and will exit it at some point and probably never own it again.  A big reason for that is that ZQK does not pay a dividend and as you know by now I have a strong bias toward dividend paying stocks.  The other reason is that the options don’t yield very much, at least not at this time.

I chose the $2.50 strike price simply because it was above the current price and and I see that S&P only has a $3 12 month target price for ZQK.  If they are right I should be able to continue to sell 2.50 strikes or roll out my existing Calls at the same strike for awhile, each time reducing my basis by a few cents.

Yesterday, Feb 22, 2010, I sold 1 FCX May10 90 Covered Call for a net deposit of $172.21 in an IRA account.  My basis for these FCX shares is now 87.46, excluding dividends received.

I had a few choices for which Call to sell on FCX and decided to sell the May10 Call to coincide with the expiration of an FCX 80 Put I sold earlier.  If I decide to allow the May FCX put to be assigned to me I will then be able to consolidate my FCX shares and sell 2 Puts.  My basis will be lower and trading costs per share are reduced when selling more contracts.

I consider FCX to be part of my core holdings.  It has recently returned to paying a dividend after withholding them since Oct 2008.  The current dividend is only .15 compared to .50 in Oct 2008 so it is not great but is a good signal for the future.