Tuesday, February 9, 2016
February 9, 2016
You have to hurry to get all the advantages of this trade. In December I added to Cummins, symbol CMI at $89. I wanted to dollar cost average as CMI slumped and wait for a call.
Today I executed that call. Provided that you own CMI by 2/11/2016 which is the expected next ex-dividend date, you could snag a nice capital gain, a very healthy call premium and the dividend.
See the tables below to illustrate the gain. The first table uses my cost basis. The second table uses the cost basis if you bought today.
Disclosure: Long CMI with calls