T Stock was added to my portfolio for the first time in 2011 and was a solid performer for the year. T Stock put trades added $3606.25 of income towards my total 2011 earnings of $163,456.00. If I deduct my SPY PUT hedge 2011 earnings, my total income from put trades in 2011 was $87,825.00. Therefore T Stock trades provided 4.1% of that entire total!
T Stock Plan For 2012
I believe that T Stock is undervalued and should be trading above $33.00. With this in mind my goal remains the same for T Stock. I will sell puts until I accept assignment of T Stock shares. I will then sell covered calls, but stretch them out so as to also try to pick up the quarterly dividend. Then once exercised out of my stock through covered calls, I will repeat the cycle. If or once T Stock moves into fair value I will be more careful to stay out of the money. If T Stock becomes over-valued, which I think may happen this year, I will sell further out of the money puts so as not to be assigned shares at over-valued prices. If the premiums do not warrant selling, should the stock move higher, I will end put selling in T Stock and move on to another stock while waiting for T Stock to fall in price. Select this T Stock link to review AT&T Investor Relations
T Stock Chart 2009 to 2011
The chart below shows the past 3 years in T Stock. You can see the gradual climb in T Stock valuation. In 2011 the Stock hit an intraday high of $31.94. The low for much of 2011 was in the $27.50 range. This made put selling straight forward in T Stock. During the period when the stock rose, I held off selling puts. You can review the 2011 T Stock trades through this link.
Unless this trend changes this year, which I believe it will by T Stock moving higher, the best premiums are going to be in the $29 and $28 put strikes. Based on the past performance both of those put strikes have a very good chance, if the stock falls and I get assigned shares, that I can sell covered calls and be exercised back out.
|Review T Stock Trades For 2011
review USA Stock Portfolio for 2012
T Stock Trades For 2012
Current T Stock Status – Year 2
Capital Currently In Use: $32020.00
|Action Taken (All Figures Are US Dollars)
ACTIVE TRADES ARE HIGHLIGHTED
|Dec 16 2011||28.85||Final Trade for 2011 was: Sold 10 Naked Puts 21JAN12 $27 for .24 (status: expired)||19.50||24019.50||220.50||3606.25|
|END OF 2011 TRADES|
|Jan 6 2012||29.68||Sold 10 Naked Puts 18FEB12 $29 @ .44 (status: expired)
Comments: I am not concerned about being assigned shares in T Stock at these levels. I believe T Stock is undervalued and is stuck in a trading range that makes a compelling case for put selling. Read more about the Jan 6 2012 T Stock trade.
|Jan 20 2012||30.51||Jan Options Expiry: 10 Naked Puts $27 expired|
|Jan 30 3012||29.20||Bought 1000 T Stock at $29.20 (status: sold $33)||7.00||1000||(29207.00)|
|Jan 30 2012||29.20||Sold 10 Naked Puts 18FEB12 $29 for .32 (status: expired)||19.50||29019.50||300.50||4327.25|
|Jan 30 2012||29.20||Sold 20 Naked Puts 17MAR12 $29 for .53 (status: expired)||32.00||58032.00||1028.00||5355.25|
|Jan 31 2012||29.42||Bought 1000 T Stock for $29.42 (status: Sold $33)
Comments: I plan to hold these shares for what I believe will be a run to at least $31.00. You can read my comments here.
|Jan 31 2012||29.42||Sold 10 Naked Puts 17MAR12 $29.00 for .47 (status: expired)||19.50||29019.50||450.50||5805.75|
|Feb 10 2012||29.80||Sold 10 Naked Puts 20APR12 $29.00 for .41
Comments: I believe T Stock is going to push higher from here and this may be my last chance for a while to sell the $29 put strike. With my Feb 29 puts about to expire I have sold out to April since I am already holding March. April could mark the last month of rises in stocks for a while if the sell in May theory holds up again this year.
|Feb 17 2012||30.01||Feb Options Expiry: 10 Naked Puts $29 expired|
|Mar 16 2012||31.59||March Options Expiry: 10 Naked Puts $29 expired|
|Apr 5 2012||30.94||Dividend 2000 T Stock shares X .44||880.00||7076.25|
|Apr 10 2012||30.00||Sold 10 Naked Puts 19MAY12 $29 for .28 (status: expired)||19.50||29019.50||260.50||7336.75|
|Apr 20 2012||30.86||Apr Options Expiry: 10 Naked Puts $29 expired|
|Apr 23 2012||30.70||Sold 10 Naked Puts 16JUN12 $29 for .28 cents (status: closed for .02 cents)||19.50||29019.50||260.50||7597.25|
|May 2 2012||33.00||Sold 2000 shares T Stock for $33||7.00||0||65993.00||7359.00||14956.25|
|May 18 2012||33.66||May Option Expiry: 10 Naked Puts $29 expired|
|May 22 2012||33.54||Bought To Close 10 Naked Puts 16JUN12 $29 for .02 cents||19.50||(39.50)||14916.75|
|No positions as I believe the stock is fully valued. Will wait for a pullback before doing any more put selling against T Stock|
|June 25 2012||34.88||Sold 10 Naked Puts T Stock 18AUG12 $34 for .68 (status expired)||19.50||34019.50||660.50||15577.25|
|July 24 2012||34.33||Sold 5 Naked Puts T Stock 22SEP12 $33 for .41 (status expired)||13.25||16513.25||191.75||15769.00|
|Aug 17 2012||37.17||August Options Expiry August $34 naked puts expired|
|Sep 21 2012||38.08||Sept Options Expiry Sep $33 naked puts expired|
|With T Stock over $38 it is very overvalued in my opinion and should pull back to the $35 level before I start more put selling|
|Oct 1 2012||37.75||Bought 5 Puts 22Dec12 $36 strike for .68 (status: sold for $1.54)
Comments: Bought these puts as I believe the stock is setting up for a decline but by buying December I have lots of time to have this trade work out, if I end up being wrong.
|Oct 12 2012||35.55||Sold 5 Naked Puts T Stock 17NOV12 $34 for .34 (status: BTC Nov 13 for .16)
|Oct 15 2012||34.90||Sold 5 Naked Puts T Stock 22DEC12 $32 for .36 (status: BTC Nov 23 for .09)
|Oct 15 2012||34.90||Sold 5 Puts 22DEC12 $36 strike for $1.54||13.25||756.75||403.50||16496.00|
|Nov 9 2012||32.85||Sold 5 Naked Puts T Stock $32 for .74 (note change in Commission rate)||10.00||16010.00||360.00||16856.00|
|Nov 13 2012||34.37||Bought to close 5 Naked Puts 17NOV12 $34 for .16||10.00||(90.00)||16766.00|
|Nov 19 2012||32.90||Sold 10 Naked Puts T Stock 22DEC12 $33 for $.92 (status: expired)
|Nov 19 2012||32.90||Sold 5 Naked Puts T Stock 19JAN13 $32 for $1.15||10.00||16010.00||565.00||18236.00|
|Nov 23 2012||34.36||Buy To Close (BTC) 5 Naked Puts T Stock 22DEC12 $32 for .09
Comments: Read this T Stock article to understand this trade.
|Dec 21 2012||33.67||Dec Options Expiry 10 naked Puts T Stock $33 expired|
|Dec 21 2012||33.67||Change In T Stock Put Selling Strategy – To understand the change please read this T Stock article.|
|Dec 31 2012||33.15||Sell 5 Naked Puts T Stock 19JAN13 $32 for .36
Comments: The pullback in T Stock means a return of 1% for 3 weeks as long as T Stock stays above $32
To understand this trade please read this article.