The Motley Fool Discussion Boards
Investing/Strategies / Options Beginners
|Subject: Selling covered call on dividend stock||Date: 11/21/2012 2:21 PM|
|Author: jkens||Number: 1098 of 1180|
I own 200 shares xyz stock bought at $27.
It pays a 5% dividend if held until end of December.
I sell 2 Jan, 2013 call options of this same xyz stock at a strike of 30 for $2 ($200).
Now, lets say the stock rallies to $35 between now and Jan expiration of the option.
- In January, I get the 5% divi for the 200 shares I own, am I responsible for any of the divi for the options sold?
- If the stock rallies above $30 before the Jan options expire, like in Dec, can they be called away prior to the option expiration date? Could they be called away in Dec resulting in me no longer being eligible to receive the divi?
|Copyright 1996-2013 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|