Tuesday, January 18, 2022

Sell to Open HPQ

Today's Call Option 
Symbol of Underlying Security:  HPQ

The Nucor calls did not work out.   Call income today is difficult but even in a down market, you can find call opportunities.

I initiated a position in HPQ in October 2021 and have been nibbling at it during down turns.  I bought it because I have purchased a number of HPQ computers and it pays a dividend and has calls.  My basis is $32.00.   I mostly like the fundamentals:

    EPS $5.46
    P/E RATIO 9.21

But, I don't love the balance sheet.  Therefore, I am willing to lose HPQ to a call buyer and I won't feel bad about that as long as I book a profit on the trade. When I am willing to lose my shares, I tend to pick a strike price closer to the current ask price.

You'll notice that I picked an expiration date that is after the next ex-dividend date so maximize my income.  We'll see if these shares are assigned before the ex-dividend rate.  Either way, I get to keep the call premium.

I try to create income every day using calls.  Even in a down market, I can usually find something.  I did not have to employ any capital to make this call option trade.  Good income investing.  MM

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