Well, as I wrote earlier I'm short WMB June $37 covered calls. WMB pays a dividend Thursday night, so I figured if I do nothing they would be exercised, and the shares taken from me on Thursday night.
So I've bought back the $37 calls, and sold Jan $38 calls for a profit of 40 cents on the option roll.
Seems like an OK trade. I've realized I've got a large cap gain on Williams, so I'd rather hang on to them as long as the stock price is going up.
This strategy (rolling forward covered calls) seems interesting. As long as the share price doesn't run away from me too much, I fget both the WMB dividend and also the call roll premium. It juices the return a decent bit.
This stratgey (rolling forward covered calls) works really well with REIT O. O pays about 25 cents each month, and you can roll forward an at the money call for about 35-45 cents each month. It turns the yield into 12% rather than O's 5%.
With WMB, if the share price continues higher, the rolling will eventually pay less and less, but I'll see what the share prices looks like next January, and in the meantime collect the regular dividend. |
