Tuesday, April 26, 2022

Adding on Weakness selling call for 4.3% yield over 25 days

Underlying Security Symbol: BCC


I have been a very active call seller during these past tumultuous days.  I just haven't had the time to write up my trades.  Over the weekend I thought Nucor was oversold.  I add in the premarket at $157.  When the market opened I sold a May 5, 2022 $160 call and received over $7.00.  The trade I am writing up today is similar.

Every good investor trolls their holdings during downswings to see if you can get something on sale.  I look for a price that is less than at least one of my buys.  If I still like the fundamentals, I add.  Sometimes I nibble, but when I can make some income on the additional shares, I will add at least 100 shares so I can sell a call for income.  Remember I am an income investor.

Boise Cascade is a stock with fundamentals that make me want to add.  Housing shortages mean demand for lumber is ongoing even with rising mortgage rates.  Moreover, Boise does pay a tiny dividend.  On the more positive side the P/E ratio is under 5 so it's not considered expensive.  And, the D/E ratio is .35 which suggests a good balance sheet and financial viability.













I added a full lot today and sold a quick call.  Just 25 days from now.  I don't really care if I capture the dividend on this lot.  I want income and am willing to lose BCC if the stock price fights the tape.

Trolling the portfolio for an asset on sale and getting a 4.3% yield in just 25 days, I like this work.

MM MoneyMadam 

Data from Schwab.com and Marketxls

1 comment:

MM MoneyMadam said...

Very nice to receive a special dividend in additional to call premiums. Makes up for the minimal quarterly dividend.MM