April 8th, 2010 at 12:46 pm
On Wednesday, 4/7/10, I sold 4 PDS Sep10 10 Covered Calls for a net deposit of $86.94 in an IRA account. My basis for these PDS shares is now 23.98, excluding dividends received.
I’ve been sitting on these PDS shares since my last Calls expired worthless in Sep08. I cannot even remember why I have waited so long to begin selling new Calls on PDS. As I look at a chart of the stock I can only guess that it was so low that I just didn’t want to sell new options on it.
PDS last paid a dividend in Feb09. It was .03 per share down from the previous .13 per share. It was the dividend that first attracted me to PDS because it was a monthly dividend. PDS is based in Canada. I don’t expect that PDS will be paying monthly dividends again when and if it resumes paying them. PDS is a Canadian Trust and the tax law changes in Canada are causing many trusts to change to standard corporations.
So, what do I do with PDS? If it does not resume paying a dividend it will not fit my general investment goals. On the other hand, you know how I hate to have a stock called away below my basis. I suspect that I will continue to hold and sell or roll out Covered Calls for as long as I can do so with a positive cash flow.
February 19th, 2009 at 12:14 pm
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.
This week, I received the following dividends in various accounts for a total of $30.63:
|
Stock
|
Shares
|
Total Dividend
|
Div per Share
|
Basis per share
|
% on Basis
|
Annual % on Basis
|
|
CKR
|
300
|
18.00
|
0.06
|
16.72
|
0.3589%
|
1.4354%
|
|
PDS
|
400
|
12.63
|
0.03
|
9.55
|
0.3306%
|
3.9675%
|
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. Note that PDS pays a monthly dividend.
January 6th, 2009 at 2:12 pm
Today I sold 4 BP Jan09 50 Covered Calls for a net deposit of $429.00 in an IRA account. My basis for these BP shares is now 63.71 without consideration for dividends received.
I really don’t want BP called away from me. It pays a good dividend of .84 per quarter which translates to about 6.85% annually. BP also tends to have a decent option premium. With all that said, I took a chance today with BP trading over 49 that it would not reach my strike price of 50 in the next 8 days prior to these options expiring. If it does, I will roll the options out and up to protect them while earning additional option premium.
I should say again that I am long term bullish on energy in general and oil in particular. In addition to these shares I own another 100 BP shares along with shares of CCJ (uranium), VLO (refining), PDS (oil well services), and MEE (coal). I just don’t think there will be enough energy to go around in the future which makes energy related stocks very attractive to me.