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Strategies & Market Trends : Option Strategies

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To: robert b furman who wrote (1891)	10/16/2017 11:54:01 AM
From: robert b furman	of 2591

OK - a longer term conservative use of some cash in my account: Today I sold 20 puts on T. T missed their earnings last week - apparently they had some unexpected expenses that were associated with both Harvey and Irma hurricanes - perhaps hard to predict?? T has been taken to the woodshed over the last several days. screencast.com I love playing T as they are a dividend aristocrat of the highest order and I believe there will continue to be demand for their digital offering i.e. smartphones and streaming of digital content - Dish TV and Time Warner - ongoing acquisition which has already had money raised by the issuing of some very inexpensive bonds. I have sold 20 January 18 2019 (1.25 years out - which if expires to zero will have capital gains tax rates). I sold them for $3.05. If put to me my net purchase price will be $31.95. For the last several years T has increased its dividend 1 cent fer quarter each calendar year - so the estimated dividend for 2019 will be $2.04. $2.04 / $31.95 = 6.39% yield. If it expires to $00.00 the $3.05 premium would yield 3.05 / 31.95 = 9.546 / 1.25 years = 7.8% taxed at capital gains rate. Beats any bank and my account just picked up $6094.03. T's 4 year low is $30.97 on 8/1 2015 - if that 4 year low holds - I'll be getting $2.04 in dividends and be $1.00 under water - I'm OK with that. screencast.com Bob

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