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

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.

On 11/24/09, I sold 6 NYX Mar10 30 Covered Calls for a net deposit of $369.48 in an IRA account.  My average basis for these NYX shares is now 68.53, excluding dividends received.

When I first acquired 200 NYX through a Put option assignment in March, 2007 it was not paying dividends.   However, it did begin to pay a .25 per share dividend soon thereafter on June 26, 2007 and now pays a .30 dividend.  I only began keeping good records of dividends received this year so do not know what it has been for the entire period I’ve owned it.  So far, in 2009, I have collected $540 in NYX dividends.

I am underwater on these NYX shares and don’t want it called away for that reason.  In addition, I like the dividends that NYX is paying and the options I make from it each month or few months.  I decided to sell the $30 strike, even though I had to go out farther that I normally like, because I do not want it called away.

Yesterday I STO 6 NYX Nov09 30 Covered Calls for a net deposit of $381.47 in an IRA account.  My basis for these NYX shares is now 69.15, excluding dividends received.

My last three Covered Call trades on NYX were at this same strike price of $30 (Jul, Aug and Oct) and they all expired worthless.  $30 looks like good resistance on the chart and certainly appears to be working for my Calls.  NYX was actually above 30 in early June but since then it has pushed up against 30 only to pull back.  It may be building a base but my charting skills aren’t really good enough to say for sure.  If so, I guess I can expect a break out one day.  If that happens I will need to do some rolling out and up.  I am liking this sideways movement though so am hoping that does not happen.