Friday, June 6, 2014

Nervous Income Investor Trade IP and RYN

Never fight the tape and never fight interest rates are good advice but I cannot help being nervous about a market that goes up on low volume and not booming economic growth.     I remain positive about dividend stocks but sometimes I work them to boost my income.   Here is my move today.

I prefer my newest 2014 Dividend Machine Rayonier, RYN to International Paper, IP.   Instead of just selling IP and buying RYN, I will sell a covered call on my IP at very close to today's price so that I pocket the covered call income as well as sell my IP position at a nice gain over my basis. 

Moreover, I will buy RYN but will sell a call on one half of the position to pocket more money.  I don't really want to lose RYN but if I do lose it, I will still hold half of my original position.  Folks this is how you make extra income from dividend stocks when you are nervous, like me.

The tables below present the covered call data on both trades.

Rayonier RYN

International Paper IP