Today I sold the following covered call in General Motors
- 1 Sell GM Jan 15 2016 $40 Call (Open) --- $.98 --- Net proceeds --- $90.30
Unlike my first experiment with GE (deep in the money call) I took a much more conservative approach this time. Currently GM is trading around $35.75 as I type so a lot of price appreciation would have to occur to lose these shares. Quite honestly it wouldn't bother me to lose them at $40.
At first glance the premium of $90.30 doesn't seem overly impressive by itself. However, when you consider 100 shares of GM currently pays $144.00 (yearly) after its recent dividend raise the combination of the two is actually very nice.
Going forward these are the types of option trades that I plan on making. Lower risk plays that will give my yearly income a boost.