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August Covered Calls Options Trades Yielded 14.6% In Options Premiums

Stock Picking, Options Trading for Income - Sat Aug 26, 2023

By Donald E. L. Johnson

Cautious Speculator

  • Average annualized options premiums returns on August covered calls trades totaled 14.61% up from 9.97% in July and a bit higher than the year-to-date returns of 14.48%.
  • Total returns were increased 53.3% by dividends collected during August. Net realized capital gains increased the month’s total income another 17.2% over the options premiums income.
  • The 14 stocks’ and one ETF’s average annual dividend yields are about 3.75%.
  • MRK and QQQ covered calls were exercised.

August covered calls trades on dividend stocks and one ETF generated and average of 0.5% options premiums returns, or 14.61% annualized.

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Annual dividend yields on the 14stocks and a ETF averaged another 3.32%. Call options premiums plus dividends were a potential 17.93% annualized. Annual RoR assumes that the same results can be realized every month during the next 12 months.

Please click on the image and zoom in for a better view.

During August, there were 17 covered calls trades on 14 stocks and one ETF.

My year to date annualize covered calls options premium returns are averaging 14.48%. Premiums plus dividends annualized are averaging about 17.8%. Year to date, I’ve done 108 covered calls trades on 66 stocks. Educational articles about those trades and the risks involved in doing such trades are on the home page.

Merck & Co. (MRK)  and Nasdaq QQQ Invesco ETF (QQQ)  were called. I did two covered calls trades on each of them.

In addition to MRK and QQQ, I did covered calls trades on The Carlyle Group (CG) , Cisco Systems (CSCO) , Dow Inc. (DOW) , Devon Energy Corp. (DVN) , Kinder Morgan (KMI) , Kroger Co. (KR) , Newmont Mining Corp. (NEM) , Pfizer Inc. (PFE) , Proctor & Gamble Co. (PG) , J.M. Smucker (SJM) , Southern Co. (SO)  and Exxon Mobil Corp. (XOM) . I also collected money market monthly interest income and dividends on other investments.

Between my weekly portfolio updates, I report my thoughts and trades in the comments section of this and other posts. When I do trades, I post reports in the comments section on the most recently published articles.

Several months of collecting puts and calls on MRK reduced the net debit to $108.24 per share. That left me with a $0.24 per share loss on the MRK trade. On Friday, I sold MRK 9.29.23 expiration puts for $1.66 a share. MRK closed Friday at $110.21.

Selling QQQ puts and calls reduced QQQ’s net debit to $360.40. It was called at $362, giving me a $1.60 a share profit. On Friday, QQQ closed at $364.02.

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Home Page. See my more than 100 articles on options trading, stocks and watch lists. If you read several of these articles, you’ll learn how my strategies are meant to work. No guarantees. Links to useful web sites are on the lower right corner of the home page. Scroll down.

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On the date of publication, Donald E.L. Johnson had a position in: CG, DOW, DVN, KMI, KR, MRK, NEM, PFE, PG, SJM, SO, XOM. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.