I'm a retiree, diversified my P&G stock, but still have a lot. No income other than dividends, so I try to add to P&G by occasionally selling covered calls. Done it many times, always expired without being called away. I think a few of you do this also. However, the stock seems hot now though, and I'm thinking about selling Jan. $70s, which only bring an 85 cent/sh premium.
Anyone think it will go through $70 by then. I have a high enough 2012 tax bill already (sold an asset), and with a low cost basis and shares in a taxable account, I hate to pay the capital gains on those shares for just 85 cents. Thoughts? Also, anyone know if a call sold with a strike date in the next year (2013) is taxable in the current (2012) year, or the next year.
For the P&G working folks out there, I wouldn't be doing this stuff if I was drawing that salary. Things change when you retire, expecially when you're holding a stock like P&G which hasn't performed well over the last few years (except for the last 3 months). Gotta juice the dividend a little
Women Review Debate 3, Governor Mitt Romney Pasted The Test, Ready to Lead USA
By USA_Jewish_Women 10 22 2012
Debate 3: Women's Review: President Obama Was Arrogant, Disrespectfully Angry Condescending to Governor Mitt Romney on Oct 22, 2012.
Mitt Romney's Stunning turnaround in these past 3 debates
Obama has lost support among Jewish women voters.
Most Jews are Turn Against Obama across the 50 states,
A Jewish Women Focus Group of 7,890 on October 22, 2012
President Obama Was arrogant, angry, disrespectfully, condescending and much to aggressive, did not look very presidential at all.
Governor Mitt Romney looked much more presidential, ready to be commander-in-chief. America he said, needs a strong economy in order to have a strong military for our National Security now and in the future.
We came away from this debate with a very good impression of Mitt Romney, in that he would be a “ a safe pair of hands.”
We feel he’s tough enough to do what’s necessary, but laid-back enough not to do too much and get us into another war. Romney did not attack President Obama's policies, he simply pointed out a few improvements in a respectable way.
During the debate Governor Mitt Romney seemed more like the president and Barack Obama more like the candidate and challenger.
Governor Mitt Romney was calm, thoughtful, relaxed, steady and looked very presidential. He looked and acted ready to take the job as commander-in-chief. Expressed his views on Iran's Nuclear threat and the USA support of Israel, our good friend and ally.
He impressed us tonight, in that a vote for him is a vote for American security, peace and safety, a strong economy, a strong military, millions of higher paying jobs, prosperity and quiet peaceful life for us and our families.
The world is much to scary these days; Americans aren’t looking for a scary weak president.
Tonight we came away with the feeling that President Obama is more the scary one, in America's weaken relationship with Israel, a closer to Nuclear Iran, our weak economy and the huge 16 Trillion Dollars in Debt, that in itself Threatens our National Security.
We can not afford four more years of president Obama's spending and borrowing another 5 or 6 trillion dollars from countries like China. Our jewish women's focus group therefore endorse Governor Mitt Romney for the next president of the United States of America.
Obama's Re-Election is very questionable. Vote for Mitt Romney and Paul Ryan
Chaz, I use the same strategy from time to time and have generally had good results.
I personally don't sell calls for premiums much under $1.00 unless I am really content with the price and trying to sell the stock. I am not smart enough to know whether the stock will be at 70 in Jan or not.
Calls are taxable when exercised or they expire. So, a Jan 13 call would generally be called or expire in Jan and taxable in 2013. However, if the stock does go above 70, there is no restriction on the buyer of your call from exercising at that point - like late Dec for example. That doesn't often happen but could if the buyer wanted the taxable event to be in 2012.
I would suggest forgetting the Jan 13 @70 and look at the following:
1. Are you willing to continue to sell some P&G stock over time to diversify further? If you'd really rather keep the stock, you probably don't want to be selling close-in calls with small premiums.
2. A better strategy could be writing some calls for longer periods of time, higher strike prices, and higher premiums. I have collected lots of premiums on these and would also be happy if the stock was called away at these higher prices.
Wish I woulda sold those Jan $70s now, could bought em back at a fraction, but you just don't know. It seemed like the run from $60 to $70, only after the Ackman involvement, was to good to be true. Perhaps Ackman only owns 1%, but I doubt if any or all of us would have gotten the opportunity to meet with McDonald and hand him a 75 page critique. That had to be humiliating for someone of his stature, whether the board backed him or not.
I retired in 1999, fortunately diversified just before the Durk Jager crash, and wished there would have been an Ackman around to help avoid that. As I said when you are working, those crashes don't look so bad, and perhaps are buying opportunities, but it's gut wrenching when you are a retiree..
Not sure if this will work but we'll see. Tomorrow is the ex div date 0.562 cents. I bought 100 shares at 68.97 and then shorted 1 April $65 call for 4.60. I only did 100 shares to experiment. I wonder if I will get assigned before the close today which would be $65+4.60 = $69.60 sales price. Wouldn't the person holding the call exercise so they can get the dividend? Also if they don't and I hold over night I will get the dividend. But the stock should drop by the ex div amount and the call should drop as well to offset. I guess the real risk is if I have to hold until April. As long as it stays above $65 I will collect the div's until I eventually get assigned. Under $65 I am a buyer anyway.