Today, 2/8/12, 2 OLN Feb12 20.00 Covered Calls were called away from me for a net deposit of $3,979.93 in my Taxable account.  Including option premiums, this sale provided a net profit of $406.41 on a stock that I have owned for about 3 months.

The shares were called away early because they go ex-dividend today and somebody wanted to collect the dividend.  From the beginning, I considered these OLN shares as a trade in this account and as such was prepared for them to be called away in February.  This is different from what I might do in another account.  My goal is to increase the value of this account as quickly as possible and one of my strategies is to acquire stocks through Put assignments and to sell those stocks through selling Covered Calls at or just above my acquisition price.  I hope to increase the speed of money movement into the account by this process.  This process has not worked quite as well as I had expected but I continue to have hopes for success.

S&P continues a 12-month price target of $26.00 and a Buy recommendation with an Excellent (100%) track record predicting OLNs price movement.  MarketEdge has a price opinion of $21.43 with a Long recommendation and a Good (53%) track record on OLN.  The 6 YAHOO analysts have a 12-month target of $24.88 with a 2.6 recommendation on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

OLN is a very dependable dividend payer having paid dividends each quarter for something like 87 years.  At a current price of $22.34, its current yield is about 3.58% at 20 cents per quarter.  I might like to own OLN as a long-term core holding but am looking to trade it in this account to generate larger current income.  I will be looking at again selling Puts on OLN to generate cash flow into the account.

On 2/3/12, I purchased 100 shares of PGF in each of 3 IRA accounts at $17.53 and $17.54.  I combined these shares with existing shares held in these accounts, which resulted in a reduction of my basis for each lot.  I now own 1100 shares of PGF in 4 IRA accounts with an average basis for each account as follows: $17.78, $17.85, $18.06 and $17.78.

At the last dividend payout, PGF is yielding me over 6.5% with its monthly dividends.  The monthly dividends are one reason that I like this ETF as they provide some small measure of leveling my monthly dividend income.

I like to sell Covered Calls on the stocks that I own.  In fact, having options available is a criterion for me to consider any stock.  Unfortunately, the options on PGF do not provide a very great return even though I have been able to sell both Puts and Covered Calls in the past.  Currently, I do not have any Covered Calls sold on my PGF shares.  I will probably sell some Calls when I can get a price for the $19 strike.  In the meantime, I will be happy with the dividend income from PGF.

PGF first came to my attention reading Jim Cramer’s latest book, “Getting Back to Even”.  It is one of the few stocks he recommended in the book.  Jim continues to make references to this book on his show as a road map to help survive the current market conditions.  I recommend the book to anybody that is interested in owning individual stock.

Today 12/19/11, I bought 100 NLY shares for a net cost of $1,640.98 in an IRA account.  My basis for these NLY shares is now $16.41.

I already own 400 NLY shares in this account with Jan12 $19 Covered Calls on them.  Assuming that those Calls expire worthless next month I will combine them with these new shares, which will reduce my basis.  I will then see about selling new Covered Calls on the 500 shares.

I sort of think of NLY as part of my core holding because of its good return (14.13% on my basis when last received on 10/27/11) and for the extra income I can receive from selling Covered Calls.  I must admit though that I bought these new shares for the dividend that I will receive next month.

I should note here that the dividend payout varies from quarter to quarter.  Since I began to track and record my dividend income NLY quarterly dividends have varied from a low of .25 on 4/29/09 and a high of .68 on 7/29/10 and again on 10/28/10.  It has slipped a little each quarter since October 2010 to .57 for the January payout.

As a point of reference, the 20 Yahoo Analysts have a 12 month price target of $17.45 and a recommendation of 2.3 where 1.0 is a Strong Buy and 5.0 is a strong sell.