September 9th, 2008 at 5:39 pm
Today I BTC 2 PM Sep08 55 Covered Calls and STO 2 Mar09 60 Covered Calls for a net deposit of $141.01 in an IRA account. My basis in PM is now 48.86.
PM closed below 55 today but has been above 55 a few times recently and I just did not want it called away from me just yet just because somebody wanted to capture the dividend. PM pays a decent dividend, which it just raised to .54 from .46 per quarter which translates to about 4% annually. I could have let it be called away at 55 and made a decent profit but would rather pick up an additional $1000 if somebody really wants to call it away. If not, I can sell calls again in March.
August 27th, 2008 at 6:43 pm
On 8/20/08, I sold 2 MO OCt08 22 Covered Calls for a net deposit of $46.50 in an IRA account. My basis for MO is now 37.26.
I sold Oct08 calls rather than Sep08 calls because I don’t want it called away and wanted to get a little better premium than the Sep08 calls offered.
I have owned MO for some time now. I acquired both KFT and PM from spin offs from MO. My basis for MO is probably too high because I didn’t do a good job adjusting it when KFT and PM were spun off. In any case, my intent is to continue to own MO, collect its .29 per quarter dividend and collect option premium every one or two months.
August 13th, 2008 at 12:38 pm
Yesterday I BTC 2 PM Aug08 55 Covered Calls and STO 2 Sep08 55 Covered Calls for a net deposit of $151.01 in an IRA account. My basis for these PM shares is now 49.56.
With the exception of a couple of days early in August PM has been moving up since about mid July. Although my basis for PM is well below the strike price I would rather keep it for its dividend and continue to milk the options for as long as I can. PM may end up this week below the 55 strike price I did not want to take the chance that somebody would call it away early or have it called away on expiration which is the reason that I rolled it out early. I considered rolling up to a higher strike price (60) but would have to gone farther out (Dec08) than I prefer and would have received only about $20 in net deposits.
