Established New Covered Call on NYSE:T
On March 11, 2022, I bought 100 shares of NYSE: T stock paying $23.58 per share and simultaneously sold 1 covered call on them with a strike price of $24 and expiry next Friday. Credit received $21 (before commissions)
T&T Inc. is an American multinational conglomerate holding company that is Delaware-registered but headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company and the largest provider of mobile telephone services in the U.S
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
In the past, I have held T stock in my dividend stock portfolio and I really enjoyed this stock because of the higher than average dividend and call options.
I sold T at a low $30 and never looked back, but today I changed my mind and decided to add T back to both my dividend stock portfolio and keep selling covered calls.
here I made a quick video about my rationale behind investing with T stock
Anyhow I want to have more covered calls in my portfolio and T seems an ideal fit - till a great about 5% dividend yield, call options, and at the end of Q2, T shareholders are getting new shares from the Warner Media spinoff (about 1 share for every 4 T shares)
here is the trade setup:
BOT 100 T Stock 23.58 USD
SLD 1 T MAR 18 '22 24 Call Option 0.21 USD
I bought 100 shares at $23.58 apiece, in total paying $2,358 and sold 1 covered call with next Friday’s expiry, for what I received a premium of $21 (before commissions)
What happens next?
On the expiry date, March 18, 2022, NYSE: T is trading under $24 per share - options expire worthlessly and I keep premium - if T trades above $24 on the expiry date, my 100 shares will get called away and I realize my max profit $56 ($42+$14) or potential 2.37% income yield in 7 days.
Break-even price: $23.58-0.19= $23.39
I’m quite optimistic about this buy and looking to hold this stock at least for one year