Dividend Investing, covered calls, Value, Special Situations
Contributor Since 2013
This is a quick report of my results to date on my subscription research work. I have run the numbers by hand with a calculator and they may be off by a tiny amount (The total premium number came up 3 different totals in 3 runs, all within $100, so I used the lowest of the 3).
The program Research attempts to identify high quality dividend income equities and the prices we'd like to own them at (fair value) for their dividend income stream. It then identifies a covered option writing strategy to buy them (Buy-write/covered calls) or to be paid to wait on them until the price is right (cash covered puts). With markets at or near highs and many stocks at high values right now, about 1/3 of the identified opportunites so far are covered calls where we buy and own the shares, boosting with out of the money covered calls which would liquidate our shares if the price rises significantly above the fair value price during the contract. The remainder are currently cash covered puts, where our money is earning handsome yields while sitting on the sidelines instead of earning nothing while idle.
Without further ado, here is our result to date:
Began with 1st Article: 4/16/2015 -- 63 days ago
To date: 19 articles with specific real time trades identified on 18 tickers (1 repeat after 1st cash covered put ran its course).Cash from premiums to date for the smallest portfolio targeted ($200,000) is based on even weight of around $10,000 per ticker with round lot trades/writes.
Total cash from premiums to date: $7,549.00 on $176,951 net invested. Currently 1 completely played out round-trip done and 18 open. 2 cash covered puts in the money and 4 covered calls in the money for net paper loss on those of $1,686.00.
Total result as of today is $5,863.00 net cash from premiums after deducting paper losses on in the money options. This is a 3.31% net absolute premium boost on the $176,951 cost basis portfolio for 63 days from initial investment (less than 40 day average investment to date), an pro-rata annualized 19.18% option writing boost **above and beyond the dividend yields on these held under covered calls). Cash reaped from dividends to date is not counted into these results either. That would further boost the total return figures. I think my $50/month ($400/year subscription fee is being adequately and quickly returned to readers).