The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: OT: dollar general for income||Date: 3/13/2014 5:18 PM|
|Author: blacktreechaser||Number: 35226 of 35367|
This may or may not interest anyone, just throwing it out here as an alternative to bonds for income.
DG does not pay a dividend, but for the past few years I've owned DG, and gotten good income from writing covered calls against it, about 6 months out at a time. The money I got from the calls has been a pretty good rate of return. Just once I had to sell my shares, but I bought right back in.
Anyways, DG reported today. Although nearly all year-to-year numbers were positive, they missed their estimates, and stock dropped down a few dollars, to 57 something. January 2015 calls are trading at $5.60 for 57 1/2 strike, and $4.50 for 60 strike.
Presently I'm obligated to the jan 2015 $65 calls, which I sold for $5.10.
No doubt lots of people think its dumb to write covered calls for income, but I do it, although it usually on dividend paying stocks.
|Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|