I was able to get a few pennies out of the market on a CVX covered call today.
music selection: “Tell Me What You Want” — Zebra
weigh-in: 226.8 (0.4) #loser
There wasn’t any liquidity in the 4 to 6 week range I usually prey to stalk prey in. Hunting was a little better at the 20NOV15 expiry (82 days out). I was assigned at 94 and sold the 95 strike making way for a little bit of capital appreciation. Pricing was 0.29. On my cost basis of 94, that comes out to an annualized 1.37%. Doesn’t seem like much but you have to remember the current yield of CVX is under 6%. It’s a big boost over just holding long term!
If called away, there will be bonus capital appreciation of about 1% or 4.7% annualized. No one ever went broke collecting bonuses like those. Chevron should also pay 1.07 (or more) in dividends in November which we stand a good chance of collecting. That would be another 5% annualized or so in yield. Yummy.
Time will tell how well oil and gas hold up between now and year end.
Devour your prey raptors!