Friday, January 28, 2022

Alcoa AA is back and I am selling calls.

Underlying Security Symbol: AA

I cannot begin to list all the options I looked at today.  Although the market is squirrelly, I have been able to "make a living" this week by selling a few calls.  Last Friday, options expiration for the month of January, was good to me.  I had 26 symbols with call expirations on 1/21/22 with nine being assigned.  That created cash and I put some of that cash to work this week.

I nibbled at a few stocks mostly to fill out a complete lot so that I could sell calls on that lot.  These included CNQ, ORCL, NUE, and AAPL.  But none of those stocks passed muster to add another full lot on which to sell calls.  I started a position in COP and immediately sold a call on that.  

Today I started looking at higher dividend yielding stocks (more than 2.5%) and tried to find stocks with low P/E ratios and good call premiums. 

I looked at GILD, QCOM, BBY, MS, PFE, JPM, WHR, and NEM.   Some of the call premiums looked good but on closer inspection I decided not to add to those names.

What I did add today is Alcoa, symbol AA.  Alcoa is back.  It has cleaned up the balance sheet and is posting very good revenue and income growth.  It is buying back some shares and has instituted a quarterly dividend.  Alcoa is a play on the inflation issues facing all investors.  Take a look at their fundamental trends:

Source:  MSN Money


I bought more AA and sold this call:

The hair on this trade is Alcoa's P/E ratio which is about 25.  This is high for me.  Let's just see what happens.  


Data from and Marketxls MM MoneyMadam

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