Dividends/Pat - Well that's great but please remind me over the weekend so I can do a proper job. T is the most obvious to me as they pay $2.04 on the $37 price tag so more than 5%. I don't particularly like them this high in the channel but it's a good, steady payer. If you want to use options as well, my trade would be:
- Buy 1,000 shares of T at $37 ($37,000)
- Sell 10 T 2022 $35 calls at $4.60 ($4,600)
- Sell 10 T 2022 $30 puts for $2.95 ($2,950)
That's net $29,450 and getting called away at $35 ($35,000) makes a nice $5,550 (18.8%) or, if assigned 1,000 more shares at $30, then average entry is $29.275 - which is where we like to buy T anyway. That will pay $2,040/year for each 1,000-share block in dividends, another 13.8% over two years so a very nice, conservative trade for anyone to add to a portfolio but, again, I'd rather wait for a pullback and, if I REALLY wanted to jump in now, I'd just sell 5 2022 $33 puts for $4 ($2,000) and that's the same $2,000 you'd collect in dividends but a much lower net entry to the downside and, next January, I'd sell 5 more more for the next year's collections (if it hasn't come down low enough to buy and DD and cover).
I like the REITs but I'm very alone there so it depends how charitable you really are as it's tricky to actually make money on them outside the dividends.
NLY, for example, is $8.83 and the 2022 $7 calls are $2 and the $10 puts are $2.60 (the $7 puts are 0.60 and not worth selling) so net $4.23 is great and they are paying $1 so massive dividend bang for the buck going out but, historically, they have been going down as much as they are paying out each quarter (faster even) so almost certainly you will be assigned 2x at $10 for $7.115 avg and very possible NLY will be around $6.50 unless conditions change with the Fed over 2 years so yes, you will have generated $2 for charity but lost maybe $1 which is efficient and possibly even tax-effective - but it goes against my nature to play that way.
