Stocks and Options » MEE

Massey Energy Company (MEE) – Sold Jan11 Call

Bill — Tue, 27 Jul 2010 19:38:16 +0000

Yesterday 7/26/10, I sold 2 MEE Jan11 40 Calls for a net deposit of $340.46 an IRA account. My basis for these MEE shares is now 29.57, excluding dividends received.

This trade provides a 5.44% simple yield and an annualized 11.14% yield on my basis. This return is greater than my average ROI which currently runs around 6.82%. I also raised my strike price by $5 over the Call contract that expired in July. I went farther out on these contracts in order to get the higher strike price and a nice premium. MEE is down about $1.77 as of this writing to 29.96 but I am also conscious that it was up around $55 as recently as last April.

MEE pays a small dividend of 6 cents per quarter which translates to an annualized return of .77% on my basis of $31.27 at the last payout. As I continue to decrease my basis the return will increase but it will be sometime before it approaches my target threshold of 4%. Even so, I continue to hold MEE for the combined dividends and option premiums.

Dividends Received, PGF, BA, VLO, BAC, NYX, MEE, IR, 2Qtr10

Bill — Fri, 02 Jul 2010 18:43:28 +0000

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.

Dividends Received, BAC, IR, NYX, PGF, MEE, 1Qtr10

Bill — Tue, 27 Apr 2010 16:53:27 +0000

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 $2,297.63 in dividends in my various accounts for 2010.

I received notice of the following dividends paid in various IRA accounts for a total of $232.72:

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.

Dividends Received, BAC, NYX, MEE, BVF, 1Qtr10

Bill — Tue, 12 Jan 2010 19:15:16 +0000

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. For example, I received a total of $6,864.10 in dividends in my various accounts for 2009.

I have received notice of the following dividends paid in my Taxable account and various IRA accounts for a total of $251.36:

Dividends Received

Massey Energy Company (MEE) – Rolled out Jan10 Calls

Bill — Wed, 06 Jan 2010 01:26:34 +0000

Yesterday, 1/4/10, I BTC 2 MEE Jan10 34 Covered Calls and STO 2 MEE Jul10 35 Covered Calls for a net deposit of $206.90 in an IRA account. My basis for these MEE shares is now 31.27, excluding dividends received.

MEE pays a small .06 per quarter dividend, up from .05 per quarter in most of 2008. The current dividend is about a .52% annual yield on the current market price or about .74% annual yield on my basis.

Because MEE does pay a dividend it does generally meet my investing objectives. On the other hand, the yield is pretty low. What mitigates the low yield is the option premium I am able to realize. In the case of this transaction with the additional option premium and the increase in strike price my return is better than 21% which is addition to the dividends.