Today I exercised my option to buy 100 shares of M.
- M: 100 shares @ $32.00 --- Yield 4.72%
Total capital invested is $3200 (stock price) + $253.70 (option premium paid) + $30 (exercise charge) for a total of $3483.70. While the purchase price yield is 4.72%, the yield based on total capital invested is only 4.33%.This purchase will add $151.00 to my yearly dividends.
The stock price is trading around $37.30 range as I type this. Like many retailers, M has been hammered dropping from the $70s down to a low of around $30.
It appears as though M is in a recover stage right now, but slower foot traffic in malls will continue to problematic for companies like M. We'll see how this plays out.
Forward dividends are $3200.00.
DEFY MEDIOCRITY
Interesting move! I only sell covered calls and an occasional put. Can you explain more about the exercise charge? Cheers,
ReplyDeletePID,
DeleteHonestly this is the first call that I have opted to buy the shares. I had no idea it would be $30. Usually I just take the profits or let the call expire worthless.
MDP
Capital One is not a great platform for options. In fact a lot of the retail "discount" brokerages are just outrageous when it comes to options fees.
ReplyDeleteAlso CapOne doesn't let you sell puts (even cash secured)...which is a way better way to get the shares if that's what you're after.
Buying options is an uphill slog. Time decay is always working against you.
Two words:
Interactive Brokers
catfishwizard,
DeleteThe inability to sell puts is a pain in the ass! I don't do a lot of option trades outside of covered calls so it's no big deal for me.
MDP