Update on my AT&T Paper Trade

I made a PaperTrade with AT&T (T) last month. I bought 1000 shares of T at $26. I made this trade to capture the dividend and also sell a Covered Call. I call this strategy “Double Dipping.” The ex-date was 1/7/22. To capture the dividend you must own the stock before the ex-date. In this case you must own the stock by 1/6/22.

Please read my post from this trade, Explanation of my AT&T Paper Trade.

The reason I’m writing about this trade now is because AT&T paid their dividend this week. This is a Paper Trade for learning, but if it was a real trade I would have gotten the 52¢ dividend on Monday, Feb 1st.

I like to take my dividends in shares and not cash. This 52¢ on my 1000 shares would be $520. On Monday Feb 1st the stock closed at $24.42. The $520 dividend would have bought me 21 additional shares of AT&T. I know own 1021 shares.

 

1/6/22 Buy 1000 Shares T @ 26.20

1/6/22 – Sell to Open 10 T 2/11/22 $27.00 C @ 50¢ (+$500)

Along with this trade I sold a 10 contract Call. As you can see this Call expires this coming Friday. So far I received $520 in shares and after this Friday I’ll have another $500 in premium.

If I get assigned, which I don’t think I will because the stock is at $24.08, I would have made the $520 in dividend, plus the $500 premium.

Since I don’t think I’ll get assigned, I’ll keep the $520 and the $500 and I can hold for the next dividend and get another premium.

Next week, after the Call expires, I’ll write about when I’d sell another Call. The date I sell the next Call is very important to this strategy. I will explain why next week.

This “Double Dipping” strategy can be a great strategy for someone who doesn’t want to trade everyday. Watch for another update post next week.

Any questions send me an email.

 

Successful Trading,

Steve

The Options Coach