(02-05-2019, 06:17 PM)vbin Wrote: @fenders taking a clue from you, sold my first option call of T at $37 for Jan 2021. I do not think T can go higher than ~37-38 in the given period and if it does I am fine with booking some profits at $37, if it ends up in the money.
Good for you. T is one of my most active option positions, because I perceive it as stuck in a trading range. My version of a "straddle" but that's not what it really is. I maintain a long position of about 300 share +/- 100 shares. I usually have a couple puts sold at about one month and another perhaps 6-8 weeks. This month with 29 strike prices. And a couple calls sold. Mine are at 32 and 33 but they are short term. I could end up with 500+ shares of T which is a little much, but not reckless given my portfolio. I could also end up with half my shares sold cheap if T runs hard quickly. If it happens I'll sell more calls on the first dip. But what is really happening is I am collecting a 7%, and option call income in the 1 1/2% per month range. My basis is rapidly dropping. Some of my initial share were purchased at about $33 so that's a good thing. Over time you can mitigate a bad buy into.
This has worked even better on MET and a few other range bound stocks that pay a high DIV. I consider it less risky than going long. There is always significant risk these accidental high yielders are going to drop more as they sort out their issues. This strat did not work out well on BAC for me. I will be rolling calls forward for awhile so I don't lose out on all the run it made this month. Nothing is perfect but the amount of income I am generating is very substantial. Thanks for listening again everyone.
