the yearly dividend is 96 cents. The question is will I have a chance to buy PFE 96 cents lower than the current price of $27.65? I'm betting I can.
I'm looking for a first buy entry of about $26.50 and a second in the $24's should I get the opportunity
what do you think?
Someone like yourself who would like to buy the stock at a little lower price and has the #$%$nds to do so is a perfect candidate for selling #$%$,lly cash-covered put options. Right now, the 26-strike Pfizer puts out to Jan. 2014 are quoted at $138 bid, $143 asked per contract.
For every 100 shares of stock that you would like to acquire, you can sell one contract and you will receive the bid price less about $1 in brokerage commissions. In this case, you will receive upfront in your account $137 for every $2,600 that you have for the purchase of Pfizer stock. One of two things will happen:
1) The stock will not go materially below $26 in which case you will simply keep the $137 in premiums that you will receive.
2) The stock will go somewhat below $26 a share before the third Friday in January in which case you will have the shares put to you. When that happens, you will pay $2,600 per 100 shares but since you received that $137 up front, the net cost of the shares would be only $24.63.
Let me know if you should have #$%$rther questions about how this works as it looks as if this is something you would want to do.