I did a covered call trade with Verizon Inc (VZ) today, looks way too easy, so I expect it will kick me in the teeth at some point. Anyway, here is the trade:
- Bought 1000 shares of VZ at $31.81
- Sold: Ten (10) November 17, 2023 Calls at $0.776
- Strike Price: $32.00
- *Premium Collected: $776.00
Verizon is trading near its 52-week low, trading at over a 41% discount to Verizon’s $54.00 Morningstar Fair Value estimate. VZ also goes ex-dividend tomorrow, so I will be collecting another $652.50 at the end of the Month, so I feel I built enough Margin of Safety into this trade. If VZ is trading above $32.00 on November 17th, and my shares are called away – it would be a quick *$1,618.50 profit.
Hopefully they don’t blow earnings later this month. That is the only real major concern I see – but again, this seems too easy, might be missing something else.
*Excludes transaction costs.
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