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Which call did you write ? Jan 19 2013 $30 ?

You are right, it went down significantly to .8683. It was 1 monday and 0 .98 last night when I placed the limit order. But market went down. It could go back to 1. That probably explains the execution. I tried the same virtual trade with some $20 calls and $40 calls, but no luck. That's...

My limit order was $69.30 . Virtual execution was at 9:31:15 . SPY at $123.85. Dec 2013 $70 call at $54.86. Net : $68.99 . So that's actually $1.01 of time value. More than 1 SPY quarterly dividend . The position currently shows a value of $68.22 . So spread is about $0.77 . Delta is shown...

OK, this is trading hours now. As I write, SPY is at 122.02 . Dec 2013 $70 call is at 53.23 Bid / $54.04 ask. I put in a virtual buy-write limit order last night for SPY and this covered call with a $69.30, and it executed. Not sure if that counts since it's virtual :) But my virtual...

Yeah. I haven't been awake during market hours lately. Will try tomorrow...

Rationalize, True. But if I hold the call to expiration and, as I believe, it expires in the money (SPY > $70), then it doesn't matter. I would pocket a little extra time premium when shares get called, ie. dividend #9 :). My guess is, I'm more likely to get called before the 2 years are...

Rationalize, What interest would I be foregoing ? The 1%/year I would get in my FDIC insured accounts otherwise ? It doesn't look like this will change much over the next 2 years. If my outlay is $70 and I collect $2.4 over one year, that's 3.5% for the first year, a lot better than 1% ...

Interesting. In the case of SPY, dividend isn't high. So getting assigned is actually even better ;) True. But it goes both ways. If SPY moves up and the gap stays the same, it is in your favor. You won't profit from the upside, but it increases the odds of getting called early and...

Yes put is greater than 0. In the $5 range. As of right now SPY is at 124.08. The Dec23 $70 call is $54.62 bid / $55.48 ask . The spread widened, and is now greater than projected dividend. For a longer term trade, one could use a call with lower strike. However it seems those are trading...

Rationalize, Thanks ! Well, those were the prices I was getting from Optionsxpress virtual trading last night when I wrote the post. I wouldn't be doing this with margin. Cash account only. The total cost is limited to what I would pay for the stock , less what I would collect for the...

Thanks. I can certainly see the uncertainty around dividends on individual dividend-paying stocks. There would be more speculation there. Less so on an index like SPY.

I would never be short the stock. No margin for me. The idea was to be long the stock and write the covered call at the same time. I would use a combined buy-write order. I would do this maybe the day before ex-dividend, or a couple days before. If I'm assigned the day before ex-dividend, I...

total_keops, Thanks, that makes sense. But just how much will it decrease ? In my example, for a 2 year LEAPS DITM option, there would still be 7 more more dividends to go before expiration. And the $70 also has $56.08 of intrinsic value. Bid/ask spread is indeed fairly large. Bid is...

I was reading the strategy described at http://www.theoptionsguide.com/dividend-capture-using-covered-calls.aspx . It goes like this : 1) Buy stock 2) Sell an in-the-money covered call 3) collect dividend 4) buy the call back and sell the stock The obvious catches I see are : - you...

For the covered call, getting assigned isn't so bad if your strike is above the price of the UL. It's not a realized loss, but it is a lost opportunity to have sold the UL for a higher profit if the UL stock price goes above strike + call premium. However, as the call writer, you are not in...

Thanks. Interesting data point. Was that for puts or calls, or for both ? What was the duration involved ?

spindr0, Thanks. Let's assume there is no pending dividend before the option expiration to take that out of the equation. Has anyone studied this to factor the probabilities of early assignments ? I'm looking primarily to sell weekly OOM SPY puts with 5 days remaining. About 98% out of the...

Yes, I rounded up the stock price by mistake, was too lazy yesterday. I didn't count the exact number of dividends either, I had calculated the dividends using the current yield %. Seems like it isn't that bad of a trade, if I think T will appreciate over the next 2 years. I didn't calculate...

spndr0, Thanks. I won't use margin though, just cash account. And interest collected on put premiums would be very close to zero at most brokers currently. Of course, that can change over time. But currently, it should not be a very important factor. Will do.

How so? I would buy stock for $30 now. Pay $3.30 for the puts. Upfront investment is $33.3. But stock has moved down to $25 or below. Stock + put is worth $25. I would have collected $3.50 of dividends by then, if they don't get lowered. So I have $28.50 left. That's 85.5% of the original...