Monday, August 20, 2012

Was options expriation weekend a good one for you?

          I love the first Monday after options expiration.   I have either make a lot of capital gains or I am presented with the opportunity to sell more calls on those dividend paying stocks. I retreat to "the counting house" and look at how I have done.  Two examples are presented below.


          This week only one of my calls was taken as a result of the buyer exercising their right to buy my stock and that company was the COP spin off Phillips  (PSX.)  PSX was sort a freebie; like shooting fish in a barrel.  The spin off cost basis is about $30.00 per share; the call strike price was $35 and the premium was $1.25.   I received a greater than four percent yield from the call premium and an over sixteen percent gain from selling the stock for a total 20.83% gain.  Folks this is good income investing.

         An even better investment was GPC.  The stock was not taken and boy am I glad.  Genuine Parts Company (GPC) formerly known as Genuine Auto Parts is a company I wish I had owned for more years than I have.  See the links below about GPC's inclusion in the very exclusive dividend machine lists of 2011 and 2012.   About every 3 or 4 months I find the opportunity to sell a call at a strike price very near to GPC's all time high.  Somehow, GPC is rarely taken.  Someday it will be taken and I will be sorry.  But income investors have to remember that there is always another company to buy that pays a nice dividend and has the growth to command covered call income.

Very Truly Yours,

TheMoneyMadam



GPC - May 2012 dividend machine pick
GPC - November 2010 (f.y. 2011) dividend machine pick

PSX and GPC Covered call Data provided below.