Monday, October 19, 2015

Financial Planning: Option Update

Friday I rolled out my MRK calls because there was a very real possibility of them being exercised. As it happened I was able to roll out 3 weeks and raise the strike to $52.50. That's still below my cost basis but that just means I have to be alert when November 6 rolls around.

The HCP calls expired worthless so this morning I was very pleased to see a little pop in its price. I got my order in and sold the 8 calls for $0.39:

After commission and fees that paid me $296.84. Unless something weird happens this will be the last activity in the account for October. For the month my income looks like this:

Not as good as last month but not to be sneezed at. MRK is still the main drag on net asset value but we'll just keep writing calls and collecting dividends as it works its way back.

November is looking to be a fun month. The MRK calls expire on the 6th so there's a good possibility I'll be able to write at least twice on that position. Right about then ED will be going ex-dividend for December so that will bear watching to avoid early exercise if ED is still in the money. My HCP and, I hope ED, calls expire on the 20th and about a week later HCP will pay its dividend of $452.00.

Edit: After the close the ED calls now have only $0.40 worth of time value. Now I just need ED to declare their dividend so I know when to roll out.

Edit 2: November 22; ED declares $0.65 dividend payable Dec. 15; for shareholders of record Nov. 18; ex-div Nov. 16. So that means that Friday November 13 is roll out day. 

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