In this short video, I'm answering a blog reader's question - how to find the best stocks to write covered calls on.
Transcript
Hello everyone my name is Reinis Fischer and you are watching my YouTube channel, where I'm talking about stock investing, options trading, and finance in general.
Today I have some great news I have got one new subscriber to my…
On September 11, 2019, I sold the following naked put- PBCT NOV 15'19 15 @0.35
I keep selling puts against (high) dividend-paying stocks I already own or I would like to have. PBCT is the stock we have just recently added to our child investment portfolio, see: Latest Stock Buy for Child Investment Portfolio: PBCT
People's United Financial, Inc. (PBCT) is a bank holding company that owns People's United Bank. The bank operates 403 branches in Connecticut, southeastern New York State, Massachusetts, Vermont, Maine, and New Hampshire.
PBCT currently is trading at $15.87 and has a yearly dividend payout of $0.71 (before tax) giving a yield of 4.47%. Dividends are paid quarterly in the following months - Feb, May, Aug, and Nov. In case I will get assigned PBCT stock before options expiry this November, we will have 100 shares paying us dividends in these months. Awesome.
Got for this trade a premium of $35, but I will be obligated to buy 100 shares of PBCTif the price will drop below $15 USD per share by NOV 15, 2019.
Break-even price: $14.65
If I will get assigned PBCT will start selling covered calls on it immediately.