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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: James F. Hopkins who wrote (12859)	5/30/2000 4:10:00 PM
From: Richard James	Read Replies (1) of 14162

Jim: Looking deeper into your dividend capture strategy. (Confirmed that I can do protective puts with Dreyfus and MLDW, and I believe Fidelity, in IRA's) Neither E-trade not DLJ will allow it. What of buying 1000 RJR @ 27-1/4, writing 10 JAN01 20s @ 10-14. Div/Sr is $3.10. Quarterly is declared payable July 3 with an ex-div date of June 7. (Still have to check its Dividend History) Should receive 2 quarterly payments (totalling $1550) by expiration. Including fees and commissions, the ROI is 25.48% over slightly less than 7 months. The annualized yield is 41%. There is much risk than the MO play and the cost of puts precludes their use. I am going to run the numbers on doing a buy/write tomorrow and closing the position as soon as I have my dividend secured. Richard

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