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.

T Stock chart for 2009 to 2011

T Stock Chart For 2009 to 2011 Shows The Gradual Climb In Valuation

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
Income Earned in 2012: $14744.75
Total Income Earned Since Trade Started In 2010: $18351.00
Total Of My Own Capital Required If All Naked Puts Were Assigned: $13669.00
Number Of Shares If All Naked Puts Were Assigned: 1000
Share Price Valuation (Total Capital Required/Number of shares): $13.67

DateStock At
Time Of
Action Taken (All Figures Are US Dollars)Comm.Shares
In Use
Dec 16 201128.85Final Trade for 2011 was: Sold 10 Naked Puts 21JAN12 $27 for .24 (status: expired)19.5024019.50220.503606.25
Jan 6 201229.68Sold 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 201230.51Jan Options Expiry: 10 Naked Puts $27 expired
Jan 30 301229.20Bought 1000 T Stock at $29.20 (status: sold $33)7.001000(29207.00)
Jan 30 201229.20Sold 10 Naked Puts 18FEB12 $29 for .32 (status: expired)19.5029019.50300.504327.25
Jan 30 201229.20Sold 20 Naked Puts 17MAR12 $29 for .53 (status: expired)32.0058032.001028.005355.25
Jan 31 201229.42Bought 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 201229.42Sold 10 Naked Puts 17MAR12 $29.00 for .47 (status: expired)19.5029019.50450.505805.75
Feb 10 201229.80Sold 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 201230.01Feb Options Expiry: 10 Naked Puts $29 expired
Mar 16 201231.59March Options Expiry: 10 Naked Puts $29 expired
Apr 5 201230.94Dividend 2000 T Stock shares X .44880.007076.25
Apr 10 201230.00Sold 10 Naked Puts 19MAY12 $29 for .28 (status: expired)19.5029019.50260.507336.75
Apr 20 201230.86Apr Options Expiry: 10 Naked Puts $29 expired
Apr 23 201230.70Sold 10 Naked Puts 16JUN12 $29 for .28 cents (status: closed for .02 cents)19.5029019.50260.507597.25
May 2 201233.00Sold 2000 shares T Stock for $337.00065993.007359.0014956.25
May 18 201233.66May Option Expiry: 10 Naked Puts $29 expired
May 22 201233.54Bought To Close 10 Naked Puts 16JUN12 $29 for .02 cents19.50(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 201234.88Sold 10 Naked Puts T Stock 18AUG12 $34 for .68 (status expired)19.5034019.50660.5015577.25
July 24 201234.33Sold 5 Naked Puts T Stock 22SEP12 $33 for .41 (status expired)13.2516513.25191.7515769.00
Aug 17 201237.17August Options Expiry August $34 naked puts expired
Sep 21 201238.08Sept 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 201237.75Bought 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 201235.55Sold 5 Naked Puts T Stock 17NOV12 $34 for .34 (status: BTC Nov 13 for .16)
Oct 15 201234.90Sold 5 Naked Puts T Stock 22DEC12 $32 for .36 (status: BTC Nov 23 for .09)
Oct 15 201234.90Sold 5 Puts 22DEC12 $36 strike for $1.5413.25756.75403.5016496.00
Nov 9 201232.85Sold 5 Naked Puts T Stock $32 for .74 (note change in Commission rate)10.0016010.00360.0016856.00
Nov 13 201234.37Bought to close 5 Naked Puts 17NOV12 $34 for .1610.00(90.00)16766.00
Nov 19 201232.90Sold 10 Naked Puts T Stock 22DEC12 $33 for $.92 (status: expired)
Nov 19 201232.90Sold 5 Naked Puts T Stock 19JAN13 $32 for $1.1510.0016010.00565.0018236.00
Nov 23 201234.36Buy To Close (BTC) 5 Naked Puts T Stock 22DEC12 $32 for .09
Comments: Read this T Stock article to understand this trade.
Dec 21 201233.67Dec Options Expiry 10 naked Puts T Stock $33 expired
Dec 21 201233.67Change In T Stock Put Selling Strategy – To understand the change please read this T Stock article.
Dec 31 201233.15Sell 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.