Thursday, January 20, 2022

Buy to Close Sell to Open QCOM

Underlying Symbol:  QCOM

 
Qualcomm, symbol QCOM is an interesting stock.  If you followed this blog when my posts were more directed toward dividend stocks, you will see I have been in and out of QCOM many times.  I also wrote (sold) a lot of calls on QCOM.  

Currently, I own QCOM and one half of my position is on call.  A $180 call will expire this Friday, as in tomorrow.   Since QCOM's price today is around $172.50, the call is nearly worthless.  I bought it back for 25 cents.  My basis on this particular lot is $151.60 which I bought a little over a year ago January 6, 2021.  The call buyer paid me $4.29 for this call.  Nothing else was going on that day !!!!

With those shares available, I sold another call on them. I selected a March 18, 2022 $180 the same strike price as the call that I bought back.  The call buyer paid me $8.10.  So if I subtract the cost of buying back the call my net premium on this trade is $7.85.   Where are you going to find an income of 5.17% today.  It's hard to beat this strategy for creating income.

Now the icing on the cake.  If my shares are taken upon expiration or any time after March 2, the ex-dividend date, I get to also keep the quarterly dividend of $.68.   Add it all up and the yield is even more impressive.  

BUY TO CLOSE:











SELL TO OPEN:

Data Source Market XLS and Schwab.com























I sell a lot of calls on QCOM and I want to remind you, it is very important to keep track of which lot.  In this case, I am using the lot with the highest cost basis.

MM

Data:  Schwab.com and Marketxls




















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