Wednesday, November 3, 2010


My EIX (Edison) DITM position was called away on October 12, when I was away on vacation. I naturally assumed it was just prior to ex-dividend; it was a pleasant surprise to receive an additional dividend of $63 which was from an ex-D in late September.

So my annualized return for the 4 month holding was 9%, not 6.1%.
Although Utilities pay high dividends, their options are not that attractive for selling calls, nor is this a great environment for the Sector. Telecoms are better - VZ, T.

Standard and Poor's reports that for the decade just past, stocks' dividends comprised 84% of Total Return. Morningstar has an attractive rating for EXC -Exelon, and Leggett -LEG.

I'm anxiously awaiting the Fed's decision on QEII.later today.

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Zero (IN)Tolerance

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