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Strategies & Market Trends : cash flow investing for retirement

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From: tyc:>	8/1/2011 1:40:16 PM
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I have been reluctant to sell calls on my high-dividend paying stocks lest the stock be called away. It seems to me, however, that reasoning is specious if the strike price assures that the profit of assignment exceeds the amount of the dividend. Moreover, you will recall the argument that 100% of the sale-premium of the call is immediately mine to spend or to re-invest. If when the call is written the premium is used to buy more shares, future dividend income will more than compounded. One such stock is POW which pays a 4.6% dividend. The following screen illustrates the profitability of assignment of 600 Sept $26 CC's without considering dividend income; ( I shall show the call premium receipt as the first of my call income for September). (Please treat screen figures as unreliable.... Just playing with the new image upload)

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