Today, 8/13/10, I sold 2 WIN Feb11 10 Puts for a net deposit of $80.47 in an IRA account.  My basis for these WIN shares, if put to me, would be 9.60, plus trading costs.

This option trade produces about a 4.0% simple return and about a 7.71% annualized return on the potential assigned cost.  The annualized return is not as high as some others I have recently made but is still higher than my current average return on my basis of 6.34%.  The reason that I went all the way out the Feb11 and chose the $10 strike price is because it fit into the cash I had available in the account while providing a large enough premium and return to make it worthwhile.

I have been looking at WIN for sometime now.  Jim Cramer has promoted it as a good dividend stock with room to grow.  One of the panelists on CNBC’s Fast Money show called it out recently.  And then today, I read a Motley Fool article that called WIN out as a good dividend stock.  After all of those references and additional research I finally decided to do something with WIN.  It’s like the gods were speaking to me.

WIN pays a 25 cent quarterly dividend for about an 8.87% annualized return on its current price.  Add an option premium now and then to the dividends and there is a pretty good annual return on the investment if it should assigned to me.  However, at this time I suspect that I will not be assigned this stock.  S&P has a 12 month price target of $15 and a 5 star rating on WIN.  On the other hand, with potential tax rates on dividends rising in 2011 with the probable expiration of the Bush tax cuts, stock like WIN may lose some of their luster and experience a price pull back.  Time will tell.