Results Week Ending 8/4/23

It felt good making one of my normal trades this week. The kind of trade I’ve made for many years, bringing in a lot of cash. I’m slowly crawling back into the game I love. I’m still not ready to dive back, at least not until the political landscape establishes a direction for the market. Don’t get me wrong, I think the market has been moving nicely but with the election upon us who knows where Wall Street can go. At the moment I like the moves the markets are making and I like the earnings reports, especially tech. However, the Dow has been moving great.

I have been making some very small trades, bringing in some small premiums, and buying small pieces of high dividend stocks. The high dividend stocks I’m in right now are: VF Corp (VFC), Medical Properties Trust Inc. (MPW), Neuberger Berman Next  Generation (NBXG) and Pimco Income Strategy (PFN). Out of this group the only flop is VFC. I bought 200 shares at $25.65 with a 7.9% dividend (51¢ quarterly). A month after I bought the stock the company reduced the dividend from 51¢ to 30¢ and the stock went down. The stock closed this week at $19.60 and my dividend is now only 4.67%. It’s only 4.67% but it is something. They were just approved for their next dividend in Sept. I’ll take it!

My other dividend stocks are doing a great job. However, when investing in high dividend stocks you never know when the dividend will be reduced or completely dropped.

This week I own 200 shares of Cloudflare Inc. (NET) at $67.10. I owned 100 shares for a few weeks and sold Calls against them. Last week I bought another 100 shares. I sold 2 contracts of the Aug 4 $70 Calls which expired on Friday. It was a little nerve wracking because the company was reporting earnings on Thursday. I sold the Call because the stock was a little below where I bought it and I was going to hold the stock. I figured if I’m going to own the stock I might as well sell a Call and take advantage of the high premium because of earnings. I would not have bought the stock just to sell the Call with earnings imminent. I did feel good that this cloud stock was going to beat the street.

I sold 2 NET 8/4/23 $70 Calls for a premium of $4.30. This is a 6.4% premium for the 1 week trade which was $860. Like I said, if I didn’t already own the stock I would not have made the trade. Getting into a trade knowing big news is coming is a gamble.

7/31/23 – Sell to Open 2 NET 8/4/23 $70.00 C @ $4.30 (+$860)

8/4/23 – Expired 2 NET 8/4/23 $70.00 C

Profit +$860

With this $860 premium, which was free money, I bought shares of my high dividend stocks, other than VFC. I bought another 30 shares of MPW. I now own 1735 shares and this stock gives me a dividend of 10.6% per year. I bought another 20 shares of NBXG. I now own 535 shares and this stock gives me a dividend of  12.2% per year. NBXG pays a monthly dividend. And I bought another 50 shares of PFN. I now own 300 shares and this stock also gives me a dividend of 12.2%. And this stock also pays their dividend every month.

I think the $860 premium went to good work. Hopefully they all keep their dividend going. I just received the monthly dividend for NBXG and PFN at the end of July and they were both approved for their normal dividend at the end of August. MPW is a quarterly dividend and is not due until October.

If you go to the page Active Trades/Current Positions and scroll down to Dividend Stocks you will see all information involving my dividend stocks, prices I paid for the stock, dividends I’m receiving and how I received all the stock. All the stock I have, after my initial purchase, I got from premiums from selling Calls and shares purchased automatically with dividend payments.

If you have any questions on my dividend stock strategy please send me an email.

 

Successful trading,

Steve

The Options Coach