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.

On 11/23/09, I received notice of the following dividends paid in an IRA account for a total of $18.00:

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.

I am still struggling with my PC so decided to write a single post to document the Covered Calls that I rolled out on Aug09 Options Expiration Friday.  They are already stale but if I don’t get them documented now I’ll never stay caught up.  So, here goes:

I rolled all of these Calls out and several of them up.  I had to go out farther than I normally like to do in order to make these trades net credits to my accounts.

BTC 2 BMY Aug09 21 Covered Calls and STO 2 BMY Dec09 21 Covered Calls for a net deposit of $106.98 in an IRA account.  My basis for these BMY shares is now 19.13, excluding dividends received.

BTC 1 MWW Aug09 15 Covered Call and STO 1 MWW Dec09 17.50 Covered Call for a net deposit of $68.49 in an IRA account.  My basis for these MWW shares is now 49.79.  There are no dividends for MWW.

BTC 2 BA Aug09 45 Covered Calls and STO 2 BA Nov09 50 Covered Calls for a net deposit of $116.99 in an IRA account.  My basis for these BA shares is now 63.41, excluding dividends received.

BTC 5 BAC Aug09 17 Covered Calls and STO 5 BAC Nov09 20 Covered Calls for a net deposit of $172.46 in an IRA account.  My basis for these BAC shares is now 23.29, excluding dividends received.

BTC 3 CKR Aug09 10 Covered Calls and STO 3 CKR Mar10 12.50 Covered Calls for a net deposit of $60.49 in an IRA account.  My basis for these CKR shares is now 15.98, excluding dividends received.

BTC 2 MO Aug09 18 Covered Calls and STO 2 MO Dec09 19 Covered Calls for a net deposit of $34.99 in an IRA account.  My basis for these MO shares is now 35.81, excluding dividends received.

And that concludes the list of Aug09 options that I rolled out rather than allowing the underlying shares to be called away.  I live to fight another day.  Now I need to write a post about some new trades I’ve made since then.

Today I sold 3 CKR Aug09 10 Calls for a net deposit of $64.75 in an IRA account.  My basis for these CKR shares is now 16.18, excluding dividends received.

CKR pays a .06 per quarter dividend for an annual yield of about 2.79% at its current price of 8.52.  My basis is about twice that so the yield on my basis is closer to 1.3%.  That yield is not great but the additional option premium helps quite a bit.  I was able to sell the front month this time but had to sell three months out last time so the option premium is not very reliable right now.

I originally purchased the CKR shares because it is a local (Southern California) company.  For a while there I was interested in purchasing shares of local companies because I thought I could get a better understanding of them and find news stories in the business section of the local paper.  I found that idea too limiting and did not really find enough meaningful information in the local papers.