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Strategies & Market Trends : Option Strategies

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longz

To: sm1th who wrote (2380)	9/30/2022 11:34:53 AM
From: robert b furman	1 Recommendation Read Replies (2) of 2591

Hi sm1th, This crappy market has bred some bargains. Yesterday I sold some October puts on T @ 15.00 strike price. At the time of this typing it is trading .40 to .41 bid/ask. I owned T for many years and sold out in the premarket after reading they would reduce the dividends. When the dividend firms up into the 7 percent range, many dividend index funds buy and provide support to price. Keep in mind that the company now has a lot less debt (free cash flow is 2.3 times the dividend which is viewed as safe once again). The basic company has good margins and few"off subject" issues now. Stanke is a tough guy and will hold price of service to allow the now reduced dividend and grow the 5G and fiber optic businesses. 1.11/15.50 = 7.16 % If you bought the stock Todays premium for October 15's is .40 to.41. That premium is .40/14.60 = .0273972/.0833 annualizes to 32.89%. If assigned the dividend yield would be 7.60%. better than a bank and taxed at a low rate. I'm OK with either alternative Keep the cash or collect the qualified dividend. Food for thought and sorry for my posting absence here. The garden is winding down and we've put away a years worth of home grown veggies. Best of trades to all. I'm bullish for the month of October as clx studies says the quarter passing allows for a much better market, contrary to all the negativity - which is a big plus! Bob

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