T Stock Trades For 2011

T stock is a new addition to my US Portfolio for 2011. AT&T Stock symbol is T. AT&T is one of the largest telecommunications companies in the world. It still dominates in a market that is extremely competitive and very price conscious.

The strategy currently being used for T Stock is to sell puts slightly out of the money until I accept assignment on T Stock shares. At that time I will sell covered calls on AT&T Stock until I am exercised out of them. I will then repeat the cycle. If I accept assignment of T Stock shares I will be selling covered calls quarterly in order to also earn the dividend.

T Stock pays a substantial dividend which has been increased each year for more than 20 years. With a dividend yield of over 6% (as of Jan 6 2011) this company, based on its earnings, book value and future potential is, in my opinion undervalued.

Select this T Stock link to review AT&T Investor Relations

review 2012 T Stock Trades
review USA Stock Portfolio for 2011

T Stock Trades For 2011 (AT&T Stock)

Current T Stock Status – Year 1

T Stock Goal for 2011: 12%
Capital Currently In Use: $27019.50
Income Earned in 2012: $3606.25
Total Income Earned Since Trade Started In 2011: $3606.25
Total Of My Own Capital Required If All Naked Puts Were Assigned: $23413.25
Number Of Shares If All Naked Puts Were Assigned: 1000
Share Price Valuation (Total Capital Required/Number of shares): $23.41
End Of 2011 Return: 13.3%


Date Stock At
Time Of
Trade
Action Taken (All Figures Are US Dollars)
ACTIVE TRADES ARE HIGHLIGHTED
Comm. Shares
Held
Capital
In Use
Gain/Loss Total
Income
Jan 6 2011 28.78 Sold 25 Naked Puts AT&T STOCK Jan $28 @ .18 (Status: Expired) 38.25 411.75 411.75
Jan 21 2011 28.33 Options Expiry – 25 Naked Puts Jan $28 expired

Jan 31 2011 27.30 Sold 20 Naked Puts T Stock Feb $27 @ .72 (Status: Bought To Close for .09) 32.00 1408.00 1918.75
Feb 11 2011 28.44 Buy To Close 20 Naked Puts Feb $27 @ .09 32.00 (212.00) 1607.75
Feb 24 2011 27.70 Sold 20 Naked Puts AT&T Stock Mar $27 @ .38 (Status: Bought To Close for .08) 32.00 728.00 2335.75
Mar 7 2011 28.00 Buy To Close 20 Naked Puts AT&T Stock Mar $27 @ .08 32.00 (192.00) 2143.75
Aug 31 2011 28.20 Sold 10 Naked Puts Sep$27 @ .34 (Status: Expired) 19.50 320.50 2464.25
Sep 1 2011 28.30 Sold 10 Naked Puts Oct $26 @ .50 (Status: Expired) 19.50 480.50 2944.75
Sep 16 2011 28.94 Options Expiry 10 Naked Puts Sep $27 expired
Sep 19 2011 28.37 Sold 10 Naked Puts T Stock Oct $26 @ .30 (Status: Expired) 19.50 280.50 3225.25
Oct 21 2011 29.13 Options Expiry 20 Naked Puts Oct $26 expired (Status: Expired)
Nov 9 2011 28.93 Sold 10 Naked Puts AT&T Stock Dec $26 @ .18 (Status: Expired) 19.50 160.50 3385.75
Dec 16 2011 28.85 Options Expiry 10 Naked Puts Dec $26 expired
Dec 16 2011 28.85 Sold 10 Naked Puts 21JAN12 T Stock $27 @ .24 (Status: Expired) 19.50 220.50 3606.25
END OF 2011 – 13.3% Return

T Stock Conclusion For 2011

With the end of the year my return has been 13.3% based on the amount of capital at risk at the end of 2011. If each trades was annualized the return would be much higher. That’s the problem with option selling, calculating a return. Instead I prefer to calculate the overall portfolio return. My US Portfolio for 2011 returned 26.8%, thanks in part to the income earned from T Stock put selling. I think this is a much better way to arrive at an overall return for option trades.I believe T Stock remains undervalued and I will continue put selling on T Stock for 2012.

 

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