FullyInformed.com - Updates and Comments

I believe people spend more time investigating what car to buy than taking care of their personal finances. 35 years ago I decided to learn how to manage, invest and grow my savings. I decided to become fully informed. I built this site to share my strategies and investments. To understand my strategies Continue Reading >>

As explained in my AT&T Stock article on Jan 31 2011, I did not hold my AT&T Stock puts until expiry. I bought to close my Feb $27 put strikes on Feb 11 for .09 cents. This represented a return of .63 cents which is better than the 75% I aim to reach on such trades. At .63 cents I earned 87.5% of the total AT&T Stock put trade for February.

Now a couple of weeks later and AT&T Stock is once again under pressure. As explained in my article Why T Stock, I look for stocks that are in trading ranges and then set up a strategy of put selling and if assigned shares, covered calls to be exercised out of those shares. It’s a simple strategy but I have found that by studying stocks such as AT&T stock, I can find those large cap dividend paying stocks that trade in ranges and benefit from them. Select this AT&T stock link to learn more about AT&T Inc for investors.

AT&T Stock – Feb 24 2011 Put Selling Again

The trading range strategy on AT&T Stock continues to pile up profits. The last 3 trading sessions of AT&T Stock has seen weakness return as sellers once again trade out of AT&T Stock. Today (Feb 24 2011) the stock fell to $27.61 before closing at $27.92. This wide range of action creates volatility which drives up options premiums. In a case such as the past 3 trading sessions, the volatility pushes up put premiums.

Over the past few sessions T stock has moved back towards my support level of $27.50 and is now touching the lower Bollinger Band.  I could wait until tomorrow to sell AT&T Stock puts but with the move lower today put premiums moved up and I captured more than 1%.  Often when a stock such as AT&T Stock is trading within a range and it hits the lower Bollinger Band, it will bounce back up which would reduce the put premiums being offered. It’s a trading choice whether to wait another day and see if the stock falls further which would push up the $27 strike put premiums, or sell puts today knowing that there is a chance the stock could turn back up reducing the put premiums available now.

Since my strategy for my entire portfolio is to earn 1% a month, this makes my decision to sell puts today on T Stock an easy one. The put premium available is better than 1%, so there is no need to wait another day. Again the importance of having a plan and sound strategy makes investing much easier and increases the chance of consistent profits.

Today I sold the AT&T Stock March $27 puts for .38 cents. This is a return of 1.4% (before commissions) on AT&T Stock. To date I have now earned 4.4% return on AT&T Stock in 3 months.

AT&T Stock / T Stock - Feb 24 2011

Weakness has returned to AT&T Stock providing another great put selling opportunity.

AT&T Stock Summary for Feb 24 2011

Each one of my AT&T Stock trades continues to show the importance of having a plan. With the confidence that AT&T Stock will stay within its trading range for the next month at least, I can continue to watch my profit grow through put selling without owning any T stock.

The plan for AT&T Stock will be the same as before. I will look to buy to close my put trade in T Stock should I earn 75% of the put premium sold and another opportunity arises. If no opportunity arises, then I will hold the sold puts on AT&T Stock until March option expiry.

Print Friendly

Disclaimer: There are risks involved in all investment strategies and investors can and do lose money. Trade at your own risk.

Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author's ideas and opinions only and the author assumes no liability for topics, ideas, errors, omissions, ads and their content and external links. Fullyinformed.com is a private website. . By using this site, you agree to be bound by its terms of use which you can read here. The Privacy Policy Is Here If you do not agree to the terms of use, do not use this site. Any corporate insignia used are registered trademarks of their respective company or corporation and are used for identification purposes only. All material copyrighted by FullyInformed.com © 2006 -2013
All Material Copyrighted 2006 to 2013 FullyInformed.com<  >Sitemap Privacy Policy      Terms Of Use      Contact Me Not Real Time Trades      Join The Options Forum