Ups stock covered call January 19, 2024 strike price 210. $9 ask

[Jetboat1]

Been with the company 15 years and have 1800 shares. Seems like a fair trade off I get 9 dollars a share today $16,200 for holding the shares for 2 years. Plus pick up the dividend another $23,328 total of $39,528. Just for holding the shares I'm I missing somthing?

 

[Up In Smoke]

Been with the company 15 years and have 1800 shares. Seems like a fair trade off I get 9 dollars a share today $16,200 for holding the shares for 2 years. Plus pick up the dividend another $23,328 total of $39,528. Just for holding the shares I'm I missing somthing?

Your numbers are flawed. The January 2025 bids are in the 16.80 range. This premium puts you in at 30k. The dividends over the next two years (3.5%) grabs you another $23k, for a total before expiration of 53k. If the option is exercised at strike price it will cost you 39k, a push at best based on your numbers. If you are selling January 2025s at $9, I'll take everything you got.

 

[Jkloc420]

Been with the company 15 years and have 1800 shares. Seems like a fair trade off I get 9 dollars a share today $16,200 for holding the shares for 2 years. Plus pick up the dividend another $23,328 total of $39,528. Just for holding the shares I'm I missing somthing?

You must of brought a lot of shares in 2008 at 40 bucks

 

[Jetboat1]

Your numbers are flawed. The January 2025 bids are in the 16.80 range. This premium puts you in at 30k. The dividends over the next two years (3.5%) grabs you another $23k, for a total before expiration of 53k. If the option is exercised at strike price it will cost you 39k, a push at best based on your numbers. If you are selling January 2025s at $9, I'll take everything you got.The

the stock price is at 185.60 if a sell a call with a strike price of 210 how do I lose money?

 

[Jetboat1]

You must of brought a lot of shares in 2008 at 40 bucks

No just $200 to $ 300 a week with dividends reinvented.

 

[Jkloc420]

@IVE GOTTA PACKAGE 4U knows

 

[Jetboat1]

the stock price is at 185.60 if a sell a call with a strike price of 210 how do I lose money?

@IVE GOTTA PACKAGE 4U knows

Knows what?

 

[Up In Smoke]

the stock price is at 185.60 if a sell a call with a strike price of 210 how do I lose money?

Is it a 2024 or 2025 call option? Your story paints two pictures.

 

[Jetboat1]

Is it a 2024 or 2025 call option? Your story paints two pictures.

I was looking at the 2024 option. Which is a year not two years. Both seem ok for selling the call maybe half in each option ? Any thoughts?

 

[IVE GOTTA PACKAGE 4U]

@IVE GOTTA PACKAGE 4U knows

Pick your investments wisely

 

[Jetboat1]

Seem UPS stock will be limited by the high dividends ie cash going out limits stock price going up!

 

[Jkloc420]

Knows what?

He knows what to do

 

[Jetboat1]

Seem UPS stock will be limited by the high dividends ie cash going out limits stock price going up!

Selling a covered call seem like a winning strategy? Ya or nay?

 

[Jetboat1]

High dividends plus increased cost (new contract) seem like profits will not go thru the roof. Two year covered call lower strike price good idea?

 

[Up In Smoke]

I was looking at the 2024 option. Which is a year not two years. Both seem ok for selling the call maybe half in each option ? Any thoughts?

So you see that your dividends will be half of your projection, right? A 4% premium on a 12% move for that duration is pretty typical, nothing special. If you believe there will be contract trouble, then your move looks a little better. What you do with the premium will dictate the value of the move. You should hedge with some late summer call options that are in the 2% range. Looks like $200s are in that price range.

 

[Wally]

Knows what?

Best not to ask that question.

 

[Up In Smoke]

Seem UPS stock will be limited by the high dividends ie cash going out limits stock price going up!

UPS announced some aggressive stock buyback plans. This will drive the price up. How much??

 

[DMW]

So you see that your dividends will be half of your projection, right? A 4% premium on a 12% move for that duration is pretty typical, nothing special. If you believe there will be contract trouble, then your move looks a little better. What you do with the premium will dictate the value of the move. You should hedge with some late summer call options that are in the 2% range. Looks like $200s are in that price

UPS announced some aggressive stock buyback plans. This will drive the price up. How much??

Be sure you understand the leverage. Do you have A shares or B shares?

 

[Up In Smoke]

Be sure you understand the leverage. Do you have A shares or B shares?

I don't believe the MOD would be able to sell a covered call with B shares. I'm assuming he has converted them and now holds them in a brokerage account.

 

[Up In Smoke]

There's a couple red flags about this thread. First, a 15yr pt employee owns 1800 shares. Second, you must hold the shares for 5 years before converting them to A shares. Third, I don't believe Computershare has an options platform, therefore the shares would have to be converted and moved to a brokerage account. Lastly, if the shares weren't moved and this trade is proposed on margins, the rewards don't outweigh the risk. I believe this was just a fictitious question in search of conversation.