In the last 1/2 hour of trading, today, I sold 20 MAR 43 calls against most of my position in BP. BP closed at 41.25. BP trades ex-dividend tomorrow. BP has been pushed rapidly and dramatically up off its lows recently by the bounce of oil from its multi-year bottom, by its quarterly conference call and recent announcements about cutting capex and protecting the dividend, and a to a lesser extent by the Court finding a smaller amount of oil leakage (than the government argued) in the Gulf spill case, and to a lesser extent by the rush to get in on the quarterly dividend payment prior to the ex-dividend date. After apx 2 strong weeks of upward oil price movement, I expect some more volatility to set in. With the stock just past its ex-dividend date, it will lose that support. As to excitement about capex reduction and "rebalancing" and the recent Court ruling, that will fade. Accordingly, I chose to supplement my next dividend payment of .60, which is now locked-in, with .40 in call premiums. I do not expect my shares will be called away on 20 MAR.
Disclosure: The author is long BP T.