Yesterday, 7/6/10, I sold 1 PGF Dec10 17 Covered Calls for a net deposit of $4.21 in an IRA account.  My basis for these PGF shares is now 15.60, excluding dividends received.

That is a pretty small deposit but it is about half of one months dividends for these shares.  If I can do at least that twice a year I have effectively added an additional month’s dividends.

I sold these Calls so far out because I really don’t want them called away but if they are I want to make a decent profit on them.  I am pretty confident that they are safe at that strike price or that I can roll them out at the same strike price for an additional deposit if necessary.

I began accumulating PGF in another account with my first purchase of 200 shares in Jan10 and a second 200 shares in May10.  I acquired these share in May10.  I will look to purchase some additional shares if I can do so at a price below my current basis so as to reduce my average basis.

At the time I purchased these shares in May I wrote the following:

The reasons I added to my position on PGF is that the price just appeared to be too low to be stay there and the monthly dividend with it’s approximately 7.4% annualized yield on current price.  Couple the dividends with the opportunity to sell Covered Calls 2 or 3 times a year and I have what I believe to be a good, safe return.

I intend to sit on the new shares and just collect the dividends until the stock price recovers above $16 at which time I will look at selling Covered Calls at $17 or $18.

PGF first came to my attention reading Jim Cramer’s latest book, “Getting Back to Even”.  It is one of the few stocks he recommended in the book.  Jim continues to make references to this book on his show as a road map to help survive the current market conditions.  I recommend the book to anybody that is interested in owning individual stock.