Today, 6/27/12, I sold 1 WFC Jul12 $32 Put for a net deposit of $54.24 in an IRA Account. My basis for these FCX shares, if Put to me, will be $32.12. This transaction represents a simple return of about 1.71% and an annualized return of about 26.04% on my potential basis with 24 days to expiration.
My July EIX $42.50 Covered Calls were assigned today for about a $436 profit but depriving me of the next dividend payout of $32.50. Somebody else wanted that dividend more than I did. I had considered rolling out the EIX Calls but decided that I would make more by letting it go and selling something else. So today I looked took part of the proceeds from the EIX sale and sold a Put on WFC. I have done nicely with WFC in the past when acquiring it near its current price and selling Covered Calls on it at the next higher strike price. That is my plan if these shares are assigned to me.
Weekly options are offered on WFC. I wanted to sell the weekly Put but there was just not enough money in it for this week. I also did not want to wait until tomorrow for next week’s options to be available. So, with a current price of about $32.60 I sold the July $32 Put. I do not really expect to be assigned these shares but will be happy to sell Covered Calls on them and perhaps capture a dividend in September if I am assigned them.
S&P has a 12-month price target of $35 with a Hold recommendation. MarketEdge currently has a price opinion of $32.81 and has a Neutral recommendation. The 30 Yahoo Analysts have a 12-month price target of $37.92 and a recommendation of 2.0 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.