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Author: blacktreechaser Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35468  
Subject: OT: dollar general for income Date: 3/13/2014 5:18 PM
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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.
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