Logical Progress Advancing a Little Bit Every Day

3Jun/130

Followup on Ford options play and dividends for this week

Ford closed at $15.89 today, recovering from a bit of a spill, so I closed out my options position in the last minute of trading for a small gain. I tried to close it out in the first minutes of trading, as it spiked into $16.10 territory, but I set my limit too low because I wasn't in a position to watch intently at the moment, so I set it and forget it. I was greedy though, I could have settled for less and it still would have been more than I made on the close. Oh well, a profit is a profit.

To summarize, I was assigned 200 shares of Ford (F) at $15.00 on the May 24th expiration, I sold two calls before the close in anticipation of assignment. Those calls got exercised on the May 31st expiration; knowing this was going to happen, I turned around and sold the $15.50 puts for June 7 expiry. I intended to hold these into expiration and see what happens, perhaps repeating the same strategy for the following week. In the end I decided I should employ my $3100 cash into something else...back to building dividend shares.

On my radar tomorrow: Pepsi (PEP), Genuine Parts Co (GPC), Kimberly-Clark (KMB) and Becton Dickenson (BDX). These all go ex-div on Wednesday. In my existing portfolio VFC Corp (VFC) goes ex-div on Thursday, but it's shot up pretty far from where I originally bought it, so I'm going to leave that. ADP is going ex-div next week but is in the same situation, moved too far from my entry point and I don't want to average up.

I also need to look at building up my positions with less than 100 shares, I need more positions eligible for covered call writing. Unfortunately positions like VFC, at about $185 per share, are going to require a lot more cash to get there, especially with the recent run up in price. It becomes a balancing act: add new positions while also adding to existing positions. At some point I'll have to decide on a more humble basket of stocks with less frequent buying intervals, I don't have enough free cash flow to keep supporting this buying behavior. For now, I'm not there yet, but I'll probably reach saturation around September or October, depending how the summer turns out.

Or, I could sit on the cash and wait to see what Ford does on Friday, but I'm kind of over that action. It's been a good two weeks, I made a nice little sum. I'm looking at other weekly options strategies like NVDA (NVDA). I suppose the conclusion of this article is that I cannot make up my mind, and that's OK. I'll let you know what happens next.

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