Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends occur on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $3,305.23 in dividends in my various accounts for 2010.  My year to date (through June) average monthly dividends received is currently $550.87.  These dividends represent 24.99% of my monthly investment cash flow and 1.82% return on my current basis value.

During June, I received notice of the following dividends paid in various accounts for a total of $367.04:

Please notice that PGF is an ETF and pays dividends monthly.  The annualized dividend yield for PGF is based upon the simple and false assumption that it will pay the same dividend each month for the next 12 months.  The actual annualized dividend yield may be more or less than illustrated here.

I use my basis per share to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio.  My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.  I calculate my basis per share as my acquisition price less any option premiums received on those shares.  I do not use dividends to reduce my basis.

Today, 4/20/10, I BTC 2 BA May10 55 Covered Calls and STO 2 BA Jan11 55 Covered Calls for a net deposit of $226.87 in an IRA account.  My basis for these BA shares is now 61.26, excluding dividends received.

This is the third time in a row that I have had to roll out BA Covered Calls but it is the first time that I have not been able to also roll them up to a higher strike price.  Of course I could have rolled them up but it would have been at a net cost rather than a net credit to my account.  I will watch BA looking for an opportunity to roll these Calls up.  If the opportunity does not present it self by Jan11 expiration I will probably roll them up even if it requires a net cost transaction, as long as the higher strike price is greater than the cost to do so.

I prefer to continue to hold onto BA.  It pays a decent dividend at .42 per quarter which equates to about a 2.37% annual yield at its current market price.  Of course, my basis is below the current market price so my return is a little higher at 2.69% on the last dividends received in Mar10.

Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends happen on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $1,518.91 in dividends in my various accounts for 2010.

I have recently received notice of the following dividends paid in various IRA accounts for a total of $558.38:

Please notice that PGF is an ETF and pays dividends monthly.  The annualized dividend yield for PGF is based upon the simple and false assumption that it will pay the same dividend each month for the next 12 months.  The actual annualized dividend yield may be more or less than illustrated here.

I use my basis per share, excluding dividends, to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio.  My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.