I may not have examples that satisfy your use of CC writing. It sounds like you are after a much higher premium than what I am after. As stated in my longer post, in short, I don't mind skimming nickels and dimes. Since my CC portion of my portfolio is significant enough skimming even 0.3 to 0.4% per month is productive.
Some of the stocks that are on my list that might work from now until Jan 18th 2014 expiration include the following. I am NOT including any dividend income in the ones below, only option premium. The list is also not any kind of endorsement to buy or sell. They are just some from the list of stocks that I watch for CC writing and that I may or may not hold at the moment. Share and option strikes are from close Dec 13th.
Abbott Labs (ABT) Price $36.40, two strikes OTM, $0.19 - income return 0.52%. Annualized 6%. If current 2 strikes OTM called: 4.4% cap gain + premium = 4.92% gain if called. Current Div 2.3%
Abbvie Inc (ABBV) Price $52.37, 3 strikes OTM, $0.25 - income return 0.43%, Annualized 5%. If current 3 strikes OTM called: 9.80% cap gain + premium = 10.23% gain if called. Current Div 3.3%
AT&T (T) Price $33.85, 2 strikes OTM, $0.20 - income return 0.59%. Annualized 7%. If current 2 strikes OTM called: 3.4% cap gain + premium = 4% gain if called. Current Div 5.4%
Dow Chemical (DOW) - (this one volatile) Price $41.52, 4 strikes OTM $0.29 - income return 0.69%. Annualized 8%. If current 4 strikes OTM called: 8.4% cap gain + premium = 9.9% gain if called. Current Div 3.1%
Intel (INTC) - Price $24.29, 2 strikes OTM $0.15 - income return 0.6%. Annualized 7%. If current 2 strikes OTM called: 7% cap gain + premium = 7.6% gain if called. Current Div 3.7%
Proctor & Gamble (PG) nice and boring. Price $82.37, 2 strikes OTM $0.58 - income return 0.7%. Annualized 8%. If current 2 strikes OTM called: 3.2% cap gain + premium = 3.9% cap gain if called. Current Div 2.9%.
In total I track around 40 to 50 stocks, all dividend payers. Also, the premiums above are from Friday when the markets were essentially flat. On down days & flat days the premiums are clearly going to be lower than on up days. So any other day this is checked could be higher or lower for the income streams.
For me, I do not really hold out all that long for up days since one month options can lose quickly to time and since I am just going to redeploy the option income to another part of my portfolio, the core, I don't really worry about how much the actual dollars end up being. Also, since I am reinvesting the premiums (and dividends) into my core holdings that I don't write options on I don't really worry about getting called. Of course, why would I complain about 3% to 5% (typical the near 10% for DOW is a rare event in my list and thus indicates higher speculation). And since I have a core portfolio that is always invested if I get called I didn't really miss any run of the market as a whole. Just on maybe a specific position or two on the option side but with the 2 strikes OTM I am pretty much promised a nice monthly return if my shares are taken from me, assuming I don't close the position and roll out or out and up for the next month.
My purpose for CC income is to always have a little extra stream of income for investing. I am not after huge premiums like I used to be as the risk was not quite worth it when you end up being wrong. However, sticking to the boring mid to large cap blue chip type stocks I get what I want. In most cases it is taking a nice dividend paying stock, doubling the actual dividend income with low risk of having to take a capital gain.
Specifically to MO, that is one that I have to trade ATM or one strike OTM to get any premium that made it worth it. For MO, and stocks like it, you may have to move out a few months rather than monthlies. In the case of MO you can write Mar 2014 $39 strikes for $0.26 - 0.7% premium. Annualized 2.5% with a capital gain if called of 5.1% + premium - 5.8% total gain, or right at 20% annualized gain if called. Not too bad but several months out like that, 99 days I believe, you have to know for sure if you want to let it get called and move on so you don't make a costly choice and possibly close out the option if it moves up. Since MO likes to run in a range, it seems but I am often wrong, you can sometimes buy it back for less than it was called away and then write options on it again.
An example of letting a stock go that you might like and then being able to buy it back later when it comes back down a little is Verizon.
I bought 500 shares of VZ at $48.90 (april 2013) and sold options on it three times for a total premium $0.78 or 1.6% total. I received dividends that came in around $1.50 or another 3% and then a tiny $0.1 cap gain. Basically, it was a very boring 5.2%ish gain for six months BUT the stock was flat that whole time, the dividend was 3% that I actually bumped my income to 5.2%. In a nutshell I had the same benefit as other VZ holders in addition to the extra 2.2% income that I added to my core holdings that have much better gains than VZ does. VZ also closed at $47.84 on Friday, or 2.4% less than what it was called away from me. Buying it on Friday and writing a $49 Jan strike would bring in $0.45 (if you don't get the dividend as well of $0.53) for a premium of 0.9%. If you managed to get the dividend as well you are talking about a cash flow of 2% and capital gain of 2.4% if called. Even boring stocks can be ok CC plays BUT at the risk of lower total return. Again, I am also using the income to grow a core portfolio so I am not really losing out that much with a boring stock as the income is put towards capital growth core holdings.
Probably overly verbose and filled with grammar issues but I think you get the idea of my approach of skimming nickels. Harder to do in a smaller account as commissions are a larger portion of the income generated but in larger accounts skimming nickels that are 0.3% premiums can actually mean $1,000 or more per month to reinvest elsewhere, spend on fun, or debt reduction, etc.
Some of the stocks that are on my list that might work from now until Jan 18th 2014 expiration include the following. I am NOT including any dividend income in the ones below, only option premium. The list is also not any kind of endorsement to buy or sell. They are just some from the list of stocks that I watch for CC writing and that I may or may not hold at the moment. Share and option strikes are from close Dec 13th.
Abbott Labs (ABT) Price $36.40, two strikes OTM, $0.19 - income return 0.52%. Annualized 6%. If current 2 strikes OTM called: 4.4% cap gain + premium = 4.92% gain if called. Current Div 2.3%
Abbvie Inc (ABBV) Price $52.37, 3 strikes OTM, $0.25 - income return 0.43%, Annualized 5%. If current 3 strikes OTM called: 9.80% cap gain + premium = 10.23% gain if called. Current Div 3.3%
AT&T (T) Price $33.85, 2 strikes OTM, $0.20 - income return 0.59%. Annualized 7%. If current 2 strikes OTM called: 3.4% cap gain + premium = 4% gain if called. Current Div 5.4%
Dow Chemical (DOW) - (this one volatile) Price $41.52, 4 strikes OTM $0.29 - income return 0.69%. Annualized 8%. If current 4 strikes OTM called: 8.4% cap gain + premium = 9.9% gain if called. Current Div 3.1%
Intel (INTC) - Price $24.29, 2 strikes OTM $0.15 - income return 0.6%. Annualized 7%. If current 2 strikes OTM called: 7% cap gain + premium = 7.6% gain if called. Current Div 3.7%
Proctor & Gamble (PG) nice and boring. Price $82.37, 2 strikes OTM $0.58 - income return 0.7%. Annualized 8%. If current 2 strikes OTM called: 3.2% cap gain + premium = 3.9% cap gain if called. Current Div 2.9%.
In total I track around 40 to 50 stocks, all dividend payers. Also, the premiums above are from Friday when the markets were essentially flat. On down days & flat days the premiums are clearly going to be lower than on up days. So any other day this is checked could be higher or lower for the income streams.
For me, I do not really hold out all that long for up days since one month options can lose quickly to time and since I am just going to redeploy the option income to another part of my portfolio, the core, I don't really worry about how much the actual dollars end up being. Also, since I am reinvesting the premiums (and dividends) into my core holdings that I don't write options on I don't really worry about getting called. Of course, why would I complain about 3% to 5% (typical the near 10% for DOW is a rare event in my list and thus indicates higher speculation). And since I have a core portfolio that is always invested if I get called I didn't really miss any run of the market as a whole. Just on maybe a specific position or two on the option side but with the 2 strikes OTM I am pretty much promised a nice monthly return if my shares are taken from me, assuming I don't close the position and roll out or out and up for the next month.
My purpose for CC income is to always have a little extra stream of income for investing. I am not after huge premiums like I used to be as the risk was not quite worth it when you end up being wrong. However, sticking to the boring mid to large cap blue chip type stocks I get what I want. In most cases it is taking a nice dividend paying stock, doubling the actual dividend income with low risk of having to take a capital gain.
Specifically to MO, that is one that I have to trade ATM or one strike OTM to get any premium that made it worth it. For MO, and stocks like it, you may have to move out a few months rather than monthlies. In the case of MO you can write Mar 2014 $39 strikes for $0.26 - 0.7% premium. Annualized 2.5% with a capital gain if called of 5.1% + premium - 5.8% total gain, or right at 20% annualized gain if called. Not too bad but several months out like that, 99 days I believe, you have to know for sure if you want to let it get called and move on so you don't make a costly choice and possibly close out the option if it moves up. Since MO likes to run in a range, it seems but I am often wrong, you can sometimes buy it back for less than it was called away and then write options on it again.
An example of letting a stock go that you might like and then being able to buy it back later when it comes back down a little is Verizon.
I bought 500 shares of VZ at $48.90 (april 2013) and sold options on it three times for a total premium $0.78 or 1.6% total. I received dividends that came in around $1.50 or another 3% and then a tiny $0.1 cap gain. Basically, it was a very boring 5.2%ish gain for six months BUT the stock was flat that whole time, the dividend was 3% that I actually bumped my income to 5.2%. In a nutshell I had the same benefit as other VZ holders in addition to the extra 2.2% income that I added to my core holdings that have much better gains than VZ does. VZ also closed at $47.84 on Friday, or 2.4% less than what it was called away from me. Buying it on Friday and writing a $49 Jan strike would bring in $0.45 (if you don't get the dividend as well of $0.53) for a premium of 0.9%. If you managed to get the dividend as well you are talking about a cash flow of 2% and capital gain of 2.4% if called. Even boring stocks can be ok CC plays BUT at the risk of lower total return. Again, I am also using the income to grow a core portfolio so I am not really losing out that much with a boring stock as the income is put towards capital growth core holdings.
Probably overly verbose and filled with grammar issues but I think you get the idea of my approach of skimming nickels. Harder to do in a smaller account as commissions are a larger portion of the income generated but in larger accounts skimming nickels that are 0.3% premiums can actually mean $1,000 or more per month to reinvest elsewhere, spend on fun, or debt reduction, etc.