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Pocketing AbbVie Premium - February 12th Option Expiration Results

Feb. 13, 2021 12:29 PM ETAbbVie Inc. (ABBV)NNN, NNN.PF, O, T, T.PR.A, T.PR.C, TBB, TBC8 Comments
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Summary

  • Pocketed the ABBV premium - lowered "cost basis" of our originally assigned shares.
  • Looking forward to more covered calls with these shares, and looking for opportunities in writing some puts as well.

Original posting on Substack! I'm sharing shorter blog posts over there of ideas outside of my regular postings here on Seeking Alpha.

The results are in!

Continuing along with our AbbVie (ABBV) options positions, we have now pocketed that small premium that we collected from the covered call. We still own the shares and will revisit next week if any moves are made.

(Source)

As a brief refresher, this covered call was written at a strike price of $111. ABBV closed Friday below this amount at $104.44 (after hours looks like $104.60.) Well away from our strike price, as we would had anticipated.

(Source - Google Finance)

We collected the full $0.28 or $28 per contract. This was after previously writing puts to enter into the position into the first place. At that time, we collected $1.18 or $118 per contract. We were assigned the shares at the $110 strike price as the price of ABBV closed below that price on the expiration day.

However, collecting that $1.18 and $0.28 will have our “cost basis” down to $108.54. Still, as we can see where shares are trading we have losses on paper. Still own the shares and looking forward to continuing doing so until these shares get called away.

What Now?

(Source)

The next move would be to revisit next week once the market opens after the long weekend. The market continues to melt up, but ABBV has been struggling to find a direction as of late. This could be a great thing as we can possibly continue to write covered calls around the $110-ish strike price area. I’m perfectly content with continuing to hold ABBV for its strong future prospects and strong dividend. So there is no rush to start writing calls at anything below our “original cost basis.”

(Source - Seeking Alpha)

Additionally, I am wanting to potentially revisit writing puts on AT&T (T) or others. I have been looking at National Retail Properties (NNN) or Realty Income (O) as I want to increase my position there anyway. All of these I have positions in already, but wouldn’t mind adding to. However, they don’t have weekly options either; so we are stuck with more limited options if going that route.

Analyst's Disclosure: I am/we are long ABBV, T, NNN, O.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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