https://DividendGrowthForum.com/ Mon, 11 May 2026 12:16:40 +0000 MyBB https://DividendGrowthForum.com/showthread.php?tid=2213 Fri, 13 May 2022 22:43:13 +0000 https://DividendGrowthForum.com/showthread.php?tid=2213 https://DividendGrowthForum.com/showthread.php?tid=1835 Tue, 19 Feb 2019 01:37:32 +0000 https://DividendGrowthForum.com/showthread.php?tid=1835
I have sold about 135 options since SEP 18, 44 sells in 2019 already.   Most of mine expired worthless yet again last week so I'll be active here starting this week as I have a lot of cash to deploy. I'll post up a sentence or two explaining why I sold an option, and my assessment of the risk of my trade.  I do hope others will ask questions as we go.  I'm not a pro for sure, but I have done this through horrendous up and down months and feel comfortable I can adequately assess risk reward.  Hopefully this makes more sense as we proceed.  Let the market pullback some and you'll see me attack this strategy with a vengeance.

Please post this thread often NilesMike, for better or worse.  I will share my mistakes as well as my victories.  This is about sharing and growing knowledge.  I enjoy the socialization but I'm not here to impress anyone.  I am going to build my DGI port with our shared strategies.  Everyone knows the market is overbought right now.  It was stupid easy after DEC pullback but it doesn't get much harder than now.   Let's show them that it's turns out OK, and less risky even when it isn't easy, as long as you keep your head. 

I truly do hope people challenge my decisions so I can defend them.  Transparency is good.  Bragging after the fact not so much.  I welcome challenges from others that are not even playing with their own money yet.  Let's see how this goes.]]>
I have sold about 135 options since SEP 18, 44 sells in 2019 already.   Most of mine expired worthless yet again last week so I'll be active here starting this week as I have a lot of cash to deploy. I'll post up a sentence or two explaining why I sold an option, and my assessment of the risk of my trade.  I do hope others will ask questions as we go.  I'm not a pro for sure, but I have done this through horrendous up and down months and feel comfortable I can adequately assess risk reward.  Hopefully this makes more sense as we proceed.  Let the market pullback some and you'll see me attack this strategy with a vengeance.

Please post this thread often NilesMike, for better or worse.  I will share my mistakes as well as my victories.  This is about sharing and growing knowledge.  I enjoy the socialization but I'm not here to impress anyone.  I am going to build my DGI port with our shared strategies.  Everyone knows the market is overbought right now.  It was stupid easy after DEC pullback but it doesn't get much harder than now.   Let's show them that it's turns out OK, and less risky even when it isn't easy, as long as you keep your head. 

I truly do hope people challenge my decisions so I can defend them.  Transparency is good.  Bragging after the fact not so much.  I welcome challenges from others that are not even playing with their own money yet.  Let's see how this goes.]]> https://DividendGrowthForum.com/showthread.php?tid=1789 Fri, 31 Aug 2018 12:42:55 +0000 https://DividendGrowthForum.com/showthread.php?tid=1789 https://DividendGrowthForum.com/showthread.php?tid=1698 Mon, 09 Oct 2017 18:09:10 +0000 https://DividendGrowthForum.com/showthread.php?tid=1698
I started a little experiment with WFC and I think the results are promising. However now with the recent rally my shares got called away and at the current levels I don't feel like continuing with WFC.... in my opinion the shares are too expensive for anything short term. I'll take another look if it returns to the $53 levels.

So let's hear it, which stocks are you using currently?]]>
I started a little experiment with WFC and I think the results are promising. However now with the recent rally my shares got called away and at the current levels I don't feel like continuing with WFC.... in my opinion the shares are too expensive for anything short term. I'll take another look if it returns to the $53 levels.

So let's hear it, which stocks are you using currently?]]> https://DividendGrowthForum.com/showthread.php?tid=1554 Mon, 11 Jul 2016 06:30:48 +0000 https://DividendGrowthForum.com/showthread.php?tid=1554
I am Gerry and I am retired 9 + years.  I decided a while back that while growing my retirement using Dividend Stocks I needed to take out a bit more than just Dividends.

I use Leap Covered Calls and Dividend stocks.

My Basic Strategy is Buy an Excellent Dividend Stock. Than write a 2 YR Leap Covered Call in which the Premium needs to AVerage 5%/YR (Pretty Easy) of the purchase price of the stock.

I harvest monthly in equal chunks the Option Premium( Which you get immediately) + the dividends when they arrive. (Ave 3%) for an ongoing yield well above the Dividend itself.

When a Stock is called away I do an immediate Buy/Write with the Best Stock Available.

I manage my Winners and My Losers for a nice income. 

I have about 275,000 worth of Dividend Harvest Money and I have been taking out $18,000 /yr for the past 6 Yrs and my 401K has grown

I spend an Average of 1 hr a week MANAGING this system it is NOT truly automatic. It can be with less profit.

I hope this helps you when it comes time to harvest your Dividend Income.

I have a website where I describe some stuff. I haven't updated it for a yr so I have added a few wrinkles . It isnt a business everything is free I am not a financial planner so please check with who ever you check with for these things.( Required Disclaimer because we live in a litigious Society.)

My Website is Dividendoptiongogo.com Good Luck

Gerry]]>
I am Gerry and I am retired 9 + years.  I decided a while back that while growing my retirement using Dividend Stocks I needed to take out a bit more than just Dividends.

I use Leap Covered Calls and Dividend stocks.

My Basic Strategy is Buy an Excellent Dividend Stock. Than write a 2 YR Leap Covered Call in which the Premium needs to AVerage 5%/YR (Pretty Easy) of the purchase price of the stock.

I harvest monthly in equal chunks the Option Premium( Which you get immediately) + the dividends when they arrive. (Ave 3%) for an ongoing yield well above the Dividend itself.

When a Stock is called away I do an immediate Buy/Write with the Best Stock Available.

I manage my Winners and My Losers for a nice income. 

I have about 275,000 worth of Dividend Harvest Money and I have been taking out $18,000 /yr for the past 6 Yrs and my 401K has grown

I spend an Average of 1 hr a week MANAGING this system it is NOT truly automatic. It can be with less profit.

I hope this helps you when it comes time to harvest your Dividend Income.

I have a website where I describe some stuff. I haven't updated it for a yr so I have added a few wrinkles . It isnt a business everything is free I am not a financial planner so please check with who ever you check with for these things.( Required Disclaimer because we live in a litigious Society.)

My Website is Dividendoptiongogo.com Good Luck

Gerry]]> https://DividendGrowthForum.com/showthread.php?tid=596 Wed, 18 Jun 2014 11:47:36 +0000 https://DividendGrowthForum.com/showthread.php?tid=596
http://www.aaii.com/journal/article/asse...14&adv=yes]]>
http://www.aaii.com/journal/article/asse...14&adv=yes]]> https://DividendGrowthForum.com/showthread.php?tid=490 Mon, 07 Apr 2014 20:19:33 +0000 https://DividendGrowthForum.com/showthread.php?tid=490 https://DividendGrowthForum.com/showthread.php?tid=484 Sun, 06 Apr 2014 11:28:53 +0000 https://DividendGrowthForum.com/showthread.php?tid=484
Liquid dividend stock. Stock prices usually dip after ex dividend date. Note weekly high of week containing ex dividend date, wait for a weekly close higher than that high. Buy a 3 month, 80+ Delta call.

Exit: 20-25% return


I've been doing it for a while and was seeking others' input and refinement.

Good luck to all.]]>
Liquid dividend stock. Stock prices usually dip after ex dividend date. Note weekly high of week containing ex dividend date, wait for a weekly close higher than that high. Buy a 3 month, 80+ Delta call.

Exit: 20-25% return


I've been doing it for a while and was seeking others' input and refinement.

Good luck to all.]]> https://DividendGrowthForum.com/showthread.php?tid=448 Sat, 15 Mar 2014 18:22:52 +0000 https://DividendGrowthForum.com/showthread.php?tid=448
I've had good results selling cash-secured puts over the last few years either collecting some relatively huge premiums when volatility was high or getting better prices on assigned stocks than buying them outright. Typically it's been close or below the market low price in the purchase time frame.

However, the only covered call I sold, EMR, was called away during a big market move even though I thought the stock was at the high end of its valuation at the time. Because of this, I've been leery of selling covered calls for fear I'd miss out on a big run up when they were called away.

I'm not an options expert and most of the terms options traders use to discuss evaluating options are foreign to me. For me, it's always been about getting some free money on a wishful bet or into a position I wanted with a slightly lower cost basis.

I usually don't go much past a 60 day strike date since, for cash-secured puts, I don't like my money tied up for much longer. You never know when a bargain someplace else appears. Likewise, if a stock with a covered call starts a steady climb upward, I don't want it called away prematurely.

That being said, these are the trades I made and my reasoning. Wondering what others think. Is my strategy sound?

I've owned a lot of INTC since 2010 with an average cost basis a hair under 20 with all the reinvested dividends. I've already trimmed it twice near the highs at the time but I still need to get rid of 100 shares to bring it where I want it for now. I sold 1 call at $25 a month ago (about 2 months out) for $69. I think it won't get much above that without a catalyst. If it expires, I'll net $58.22 in premium which should work out to a 2.3% gain ($58.22/$2500) over 2 months which annualizes to around around 12%. Am I thinking correctly here? In which case, I turn around and do it again if the premium is sufficient. If it is called, net proceeds will be $25.37 or a gain on those 100 shares of 27% using the average cost basis.

I've owned ABBV since 2011 when it was still part of ABT and kept it after the split. It's still yielding about 3.3% and has good prospects in the pipeline but it will be 2-3 years before any of their major new products come to market. In the meantime, it's relying on Humira and the rest of the off-patent stable to keep the cash flowing. I only really need to get rid of 10-20 shares to bring it in balance with the rest of the portfolio but thought I'd try my hand at some extra income first. With a trailing P/E around 20 and it trading near the highs over the last year, I don't think it's going to jump up much in a month. I sold a call at $52.50 for net proceeds of $109.22 which should yield 2% ($109.22/$5250) in just over a month or about 11-12% annualized. If it's called, the capital gains would be in the 80% range and then I'd go back and sell some puts to put it back in the portfolio. It's a position that I want to hold for the longer term.

Lastly, my gambling itch. Sold a 60 day put on MAT for $36 with net proceeds of $124.22. The balance sheet is pretty good with debt to cash of $1.6B/$1.04B, debt/equity of around 50%, current ratio of around 3.3. Income statement is not bad y-o-y, they were just slammed with Barbie being out of favor over Christmas. They are yielding around 4% with a 55% payout ratio. I wouldn't mind holding it for a value play and then selling for some gains. Their dividend track record hasn't been as good as HAS but the company has been around for a loooooong time and is probably experiencing a temporary setback that they'll figure a way out of. If it expires, I'm expecting to gain 3.5% ($124.22/$3600) over 2 months or around 20% annualized. If exercised, I'll have 100 shares with a net cost basis of $34.96 that I can either sell immediately for a gain of 6% net of commissions or start selling covered calls for more premium. In the meantime, I can collect the 4% dividend while I wait for it to leave the portfolio.

So, is my logic reasonable?]]>
I've had good results selling cash-secured puts over the last few years either collecting some relatively huge premiums when volatility was high or getting better prices on assigned stocks than buying them outright. Typically it's been close or below the market low price in the purchase time frame.

However, the only covered call I sold, EMR, was called away during a big market move even though I thought the stock was at the high end of its valuation at the time. Because of this, I've been leery of selling covered calls for fear I'd miss out on a big run up when they were called away.

I'm not an options expert and most of the terms options traders use to discuss evaluating options are foreign to me. For me, it's always been about getting some free money on a wishful bet or into a position I wanted with a slightly lower cost basis.

I usually don't go much past a 60 day strike date since, for cash-secured puts, I don't like my money tied up for much longer. You never know when a bargain someplace else appears. Likewise, if a stock with a covered call starts a steady climb upward, I don't want it called away prematurely.

That being said, these are the trades I made and my reasoning. Wondering what others think. Is my strategy sound?

I've owned a lot of INTC since 2010 with an average cost basis a hair under 20 with all the reinvested dividends. I've already trimmed it twice near the highs at the time but I still need to get rid of 100 shares to bring it where I want it for now. I sold 1 call at $25 a month ago (about 2 months out) for $69. I think it won't get much above that without a catalyst. If it expires, I'll net $58.22 in premium which should work out to a 2.3% gain ($58.22/$2500) over 2 months which annualizes to around around 12%. Am I thinking correctly here? In which case, I turn around and do it again if the premium is sufficient. If it is called, net proceeds will be $25.37 or a gain on those 100 shares of 27% using the average cost basis.

I've owned ABBV since 2011 when it was still part of ABT and kept it after the split. It's still yielding about 3.3% and has good prospects in the pipeline but it will be 2-3 years before any of their major new products come to market. In the meantime, it's relying on Humira and the rest of the off-patent stable to keep the cash flowing. I only really need to get rid of 10-20 shares to bring it in balance with the rest of the portfolio but thought I'd try my hand at some extra income first. With a trailing P/E around 20 and it trading near the highs over the last year, I don't think it's going to jump up much in a month. I sold a call at $52.50 for net proceeds of $109.22 which should yield 2% ($109.22/$5250) in just over a month or about 11-12% annualized. If it's called, the capital gains would be in the 80% range and then I'd go back and sell some puts to put it back in the portfolio. It's a position that I want to hold for the longer term.

Lastly, my gambling itch. Sold a 60 day put on MAT for $36 with net proceeds of $124.22. The balance sheet is pretty good with debt to cash of $1.6B/$1.04B, debt/equity of around 50%, current ratio of around 3.3. Income statement is not bad y-o-y, they were just slammed with Barbie being out of favor over Christmas. They are yielding around 4% with a 55% payout ratio. I wouldn't mind holding it for a value play and then selling for some gains. Their dividend track record hasn't been as good as HAS but the company has been around for a loooooong time and is probably experiencing a temporary setback that they'll figure a way out of. If it expires, I'm expecting to gain 3.5% ($124.22/$3600) over 2 months or around 20% annualized. If exercised, I'll have 100 shares with a net cost basis of $34.96 that I can either sell immediately for a gain of 6% net of commissions or start selling covered calls for more premium. In the meantime, I can collect the 4% dividend while I wait for it to leave the portfolio.

So, is my logic reasonable?]]> https://DividendGrowthForum.com/showthread.php?tid=313 Mon, 16 Dec 2013 22:53:08 +0000 https://DividendGrowthForum.com/showthread.php?tid=313
I think F is going to do well over the medium-term, but I've got enough shares outright so don't want to just buy some more long shares. Plus I don't want to tie up much powder on this play.

I'm tempted to buy the January 2016 $15.00 strike, which is currently going for $3.40.

What do you think? I have very little options experience or knowledge -- is there an obviously better approach?

Thanks!]]>
I think F is going to do well over the medium-term, but I've got enough shares outright so don't want to just buy some more long shares. Plus I don't want to tie up much powder on this play.

I'm tempted to buy the January 2016 $15.00 strike, which is currently going for $3.40.

What do you think? I have very little options experience or knowledge -- is there an obviously better approach?

Thanks!]]> https://DividendGrowthForum.com/showthread.php?tid=286 Tue, 12 Nov 2013 13:30:36 +0000 https://DividendGrowthForum.com/showthread.php?tid=286
1. I search http://ycharts.com/companies/KO/dividend_yield for stocks on my list that are at the upper or lower end of their 5 year yield.

2. Off that list I go to the option chain and see what open interest looks like 6 months out (May 14 Options).

3. I find an option with a 70+ Delta, it captures 70% of the stocks' price move, and buy that option.

4. Wait for stock to rotate back toward the other end of the yield range and sell the option.

Risk is what is paid for the option which if stock doesn't move in 6 months, it will expire worthless. 6 months appears to be sufficient for these types of stocks to rotate away from the yield side that you bought it at.]]>
1. I search http://ycharts.com/companies/KO/dividend_yield for stocks on my list that are at the upper or lower end of their 5 year yield.

2. Off that list I go to the option chain and see what open interest looks like 6 months out (May 14 Options).

3. I find an option with a 70+ Delta, it captures 70% of the stocks' price move, and buy that option.

4. Wait for stock to rotate back toward the other end of the yield range and sell the option.

Risk is what is paid for the option which if stock doesn't move in 6 months, it will expire worthless. 6 months appears to be sufficient for these types of stocks to rotate away from the yield side that you bought it at.]]> https://DividendGrowthForum.com/showthread.php?tid=221 Sat, 28 Sep 2013 16:18:22 +0000 https://DividendGrowthForum.com/showthread.php?tid=221
Assuming a flat open on Monday, I could just sell the 300 shares at the current price of $22.98 for $6894, minus the $7 commission, for a final total of $6887.

Or I could use covered calls to juice my returns a bit. Here’s how I imagine that would work (go easy on me if I’ve botched this, never done it before):

I could write the October $22s for a premium of 1.23 per share. So I would collect $369 in premiums, minus $10 in commissions, for a total of $359 in. If the stock is above $22 when the options expire, they will get called away from me at $22 per share. So I’d collect $6600, less another $10 commission, or $6590. Add that to the premium I collected, and I’d net $6949. A slightly better outcome that the $6887 I’d get for just selling the shares. If the stock is below $22 when the options expire, I keep the $359 premium and start all over again.

Questions:

1) Did I get all of that right?

2) Should I choose a different strike price or expiration date to increase the outcome (relative to just selling outright)?

3) Very sadly, all of my INTC shares are in a regular taxable brokerage account. Is the option premium I collect treated as regular taxable income? Or is it considered part of my capital gains (short term? long term?)?

4) I’ve accumulated the INTC shares at various prices. I assume I want to sell the shares that I bought at the highest prices so as to either minimize the capital gains or perhaps even harvest a slight loss. Is that right? The brokerage should be able to make it easy enough to specify which shares I’m writing the call on, right?

5) Anything else important I’m overlooking?

Thanks in advance for your help!]]>
Assuming a flat open on Monday, I could just sell the 300 shares at the current price of $22.98 for $6894, minus the $7 commission, for a final total of $6887.

Or I could use covered calls to juice my returns a bit. Here’s how I imagine that would work (go easy on me if I’ve botched this, never done it before):

I could write the October $22s for a premium of 1.23 per share. So I would collect $369 in premiums, minus $10 in commissions, for a total of $359 in. If the stock is above $22 when the options expire, they will get called away from me at $22 per share. So I’d collect $6600, less another $10 commission, or $6590. Add that to the premium I collected, and I’d net $6949. A slightly better outcome that the $6887 I’d get for just selling the shares. If the stock is below $22 when the options expire, I keep the $359 premium and start all over again.

Questions:

1) Did I get all of that right?

2) Should I choose a different strike price or expiration date to increase the outcome (relative to just selling outright)?

3) Very sadly, all of my INTC shares are in a regular taxable brokerage account. Is the option premium I collect treated as regular taxable income? Or is it considered part of my capital gains (short term? long term?)?

4) I’ve accumulated the INTC shares at various prices. I assume I want to sell the shares that I bought at the highest prices so as to either minimize the capital gains or perhaps even harvest a slight loss. Is that right? The brokerage should be able to make it easy enough to specify which shares I’m writing the call on, right?

5) Anything else important I’m overlooking?

Thanks in advance for your help!]]> https://DividendGrowthForum.com/showthread.php?tid=214 Thu, 26 Sep 2013 18:26:05 +0000 https://DividendGrowthForum.com/showthread.php?tid=214
For me a threshold question is taxes and accounting. For those of you who use options a lot, do you only do so in tax-deferred accounts? Am I right to think that if you used options heavily in a taxable account, it would be a giant hassle to track the trades and incoming premiums, not to mention the sell prices and long-term vs short-term capital gains, etc. etc.?

And am I right to think that pretty much all of that is a non-issue in a rollover or Roth IRA?

Thanks in advance!]]>
For me a threshold question is taxes and accounting. For those of you who use options a lot, do you only do so in tax-deferred accounts? Am I right to think that if you used options heavily in a taxable account, it would be a giant hassle to track the trades and incoming premiums, not to mention the sell prices and long-term vs short-term capital gains, etc. etc.?

And am I right to think that pretty much all of that is a non-issue in a rollover or Roth IRA?

Thanks in advance!]]> https://DividendGrowthForum.com/showthread.php?tid=213 Thu, 26 Sep 2013 13:35:39 +0000 https://DividendGrowthForum.com/showthread.php?tid=213
If not overloaded on INTC, I would take this position this a.m. But that is because I like INTC's long term fundamentals, like to be long the stock, and like their history of dividend growth.]]>
If not overloaded on INTC, I would take this position this a.m. But that is because I like INTC's long term fundamentals, like to be long the stock, and like their history of dividend growth.]]> https://DividendGrowthForum.com/showthread.php?tid=212 Thu, 26 Sep 2013 12:06:04 +0000 https://DividendGrowthForum.com/showthread.php?tid=212