At the risk of sounding more schadenfreude than sympathetic advisory, I thought I should list all the positions in my personal accounts (fully invested), and how they are performing in relation to their "safety nets" provided by selling Deep-In-The-Money covered calls - especially on this dark day with the Down Jones off over 400 points:
SYM / PRICE /CALL /PTS.ABOVE/BELOW
BMY .. 31 .. 27.... +4
COP .. 70 .. 62 1/2. +7 1/2
CVX .. 104.. 92 1/2.. +11 1/2
DIA .. 118 .. 120 ... -2
EPD.. 44.. 41 ... +3
ERF .. 28.. 29.... -1
GE PUT. 15.9. 16... 0
INTC .. 24... 22 .. +2
KKR .. 13.. 15.... -2
KMB.. 70 ..70 .... 0
LINE.. 36 .. 37 ... -1
LLY .. 38 ... 35.... +3
LO 107 1/2 100 +7 1/2
MAT.. 28 .. 26 ... +2
NEE PUT. 55 . 55... 0
NOC .. 58.3.. 60 .. -1.7
PM ... 70... 70.... 0
SVU .. 6.9... 9... -2.1
TLT .. 118 ... 106.. +12
TOT.. 50.4 ... 50 .. +.4
WM... 31.. . 36 ..... -5
The two Puts were sold to take on the stocks, which were ex-D farther out in time, earning money while waiting to do the Buy/Write. In the case of puts gone bad, such as WM, it is possible to roll them out in time, earning nice premium until recovering - often this equals or exceeds the DITM dividend/extrinsic amount, but is riskier.
Love the topic of your blog. DITM covered calls on quality dividend-paying companies are indeed a sane, profitable way to make money, especially in a tax-deferred account like an IRA. Grat Blog!
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