I'm reporting an options assignment from last week. I originally sold a Feb 22 $38 KO Put @ 1.67 on 08/19/13. I mentioned this here.
Since coke was trading below $38 on Feb 22nd, I was assigned 100 shares at a cost of $36.33. After commissions of $10.76 to sell the put and $19.99 for assignment, the actual cost basis was $36.84/share. This is still about a $1.00 below current market prices.
My YOC for this transaction is 3.3% after the latest dividend increase.
These 100 shares will increase my yearly dividend income by $122.
I now own 221 shares of KO and this transaction also lowers my cost basis from $39.33/share to $38.11/share (about 3%).
I plan to have KO/PEP be half positions in my portfolio. I also don't mind going a little overweight on a dividend stalwart like KO when I believe it's on sale anyways. I still have two remaining KO puts that could also get assigned this year.
Brent,
ReplyDeleteCan't imagine you'll be unhappy with KO at that price over the long haul. Great job!
Now it's time to have a Coke and a smile. :)
Best wishes!
Hi DM,
DeleteThanks! I agree. KO is a position I could see holding forever. I don't like to say hold and forget about it but KO is probably one of the closest stocks for that philosophy.
How's the time off treating you? I'm not sure how the weather is there but it's been awesome here in Austin this past weekend, between 60-80 and sunny. It's a glimpse of what you could be doing each and every day once you hit FI. I know my time off from work sure motivates me.
I think I may have to buy a coke after hitting the gym today of course.
Cheers!
Haha, That sure sounds like a winner AAI. You get a great company with a basis below the current price. I have been a long time owner of Coke shares, and have been very happily rewarded. You likely will be also.
ReplyDelete-Bryan
Hi Income Surfer,
DeleteYou're right! It's hard to lose when I get to buy a solid Dividend Champion below current prices and below my cost basis. Congrats on being a fellow shareholder! We should have increased dividends for many years to come.
Take care!
In Germany we can only trade with warrants and not with options.
ReplyDeleteFor trading with options you must have a lot of money!
Warrants (call or put) you can buy like simple shares...
Best regards
D-S
Hi D-S,
DeleteI don't know anything about warrants. My options account is marginable so I can use some leverage to trade with without paying any interest. This means I can have more outstanding open options with less cash in my account. So far It's working out well.
Thanks for stopping by!
I too plan to get some shares of KO. Hopefully it stays at this level. Great pick up.
ReplyDeleteFFdividend,
DeleteI like KO here. My position is now overweight but I don't mind being overweight buying a Dividend Champion near their 52-week lows.
Cheers!
Nice allocation AAI. I like the averaging.
ReplyDeleteDividend Mom
Hi Dividend Mom,
DeleteThanks! I've been using options for over a year to earn extra income and reduce my cost basis on positions I wanted to add to anyways. So far it has been working well.
thanks for stopping by!