Thursday, November 14, 2019

TGT sell call on WMT earnings

I like Target, symbol TGT.   Presented below is another example of how to use a rival's earnings to take a short term position before your company reports.   Walmart had good earnings but in the after market it is only o.k.  But WMT's business is perceived as being positive and that helps it's closest competitor Target.

Income investors are looking for a position that provides call premium income from selling (a.k.a. writing) a call; and we want the quarterly dividend; and we want a capital gain should we have our stock called away.

An eight day call that meets a number of an income investor's goals.

What happens if in the next 10 days or so the stock tanks on it's own earnings and you are stuck with it?  That is when you want to make sure you can stomach holding a dividend stock over a longer period of time than 10 days.  TGT is an okay hold by me at this time.  - Goal met:  conservative income investment.

I will risk losing it and I will risk keeping it.   It is all about income.  Goal met:  income with out without the call being assigned.  If it is assigned, capital gain is realized;  Goal met; capital gains.


Usually posts about calls are yesterday's news.  Call buyers and sellers know there are few values more volatile than call premiums.   I am writing up a call that I will try for tomorrow.  November 15, 2019.

M* MoneyMadam

Good income investing.   Disclosure no position but expect to add if the conditions warrant.