I am considering selling covered calls against my 12,800 shares to pick up a little extra change. I want to sell January calls so that just in case my stock gets called I do not have the gains in this tax year and the April calls are too far out for me. Preferably my stock will not get called away as I want to keep LINE for income.
I'm looking at the Jan $37 calls to sell for 5 cents. I want to keep my shares, but it would still be nice to get a little kicker. Given the higher buyout price for BRY is it a safe bet that LINE will stay below $37 through January? I will not sell anything $35 or under as I see risk that LINE could get up to $35 fairly easily.
Yeah, I know that a nickel doesn't sound like much, but that is 2.5 cents per month and 10% bonus on top of the dividend. A 10% dividend raise is a big deal, so why not add that bonus myself?
I had the same dilemma and solved it by buying 1K shares of lnco at 32.5 and selling the Nov 33 call for about $1600. Wont be anywhere as good a deal for Dec, but should be able to at least double the distribution. Since I bought lnco just for that purpose, no problem with it being called. If called, just rebuy and sell the new covered call.
Why not sell Jan 25 Puts for .55 use your current shares to cover the margin.
Pretty substantial odds that LINE not down to 25, and if so, your basis would only be 24.45. You get the cash now, but don't have the tax bill until you buy to close or let expire.