What are my choices? I could buy a 3 month CD or put it in Schwab's money market and get something like 1.5%. I prefer to take some risk on this stock in exchange for a quick 2.17% yield from selling a call with an expiration date just 15 days out. I am selecting a strike price that is close to my basis and I expect to be called away. If these shares are called away in 15 days, my total return will be 3.38% in just 15 days.
| Stock | Price on Open | Call Expiration |
| WSO | $172.95 | 2/21/2020 |
| Cost Basis: | 2/7/2020 | $172.90 |
| Strike Price: | $175.00 | |
| Call Premium: | $3.75 | |
| Dividend | Ex-div after exp. | $0.000 |
| Call Yield on Basis | 2.17% | |
| Call + Dividend Yield on Basis | 2.17% | |
| $ Gain if Assigned | $5.85 | |
| Max Return if Assigned | 3.38% |
Let's say the market and WSO continues on a weak run and I am stuck with more shares of WSO. That is okay by me. WSO pays a very nice dividend and likes to raise the dividend. Take a look at the fundamentals.
| WSO | Earnings | Dividend |
| Earnings > Dividend | $6.42 | $6.40 |
| Debt to Equity | 0.27 | |
| Dividend Yield | 3.70% | |
| 3 Yr. Rev. Growth | 3.33% |
Good income investing. Use the interactive tool below to enter your basis, strike price, premium and if appropriate quarterly dividend to determine if the call available works for you.
M* MoneyMadam
Disclosure: Long WSO with calls
