Last week I wrote about my first options trade for DivGro. As mentioned in that article, one of my goals this year is to find opportunities to boost dividend income. I don't want to do this by chasing yield. Rather, I'd like to use options to generate a little extra income in addition to the dividend income I already receive.
One way to boost income is to sell covered calls against stocks I own in my DivGro portfolio. I can sell one call for every 100 shares I own and collect the option premium in return.
Another way to boost my income is to sell a cash-secured put on a stock I would like to own at a strike price I'm willing to pay. The put buyer will have the right to sell me 100 shares of the stock at the strike price before the option's expiration date.
this article at Seeking Alpha.
I provide full details of the trade and explain the possible outcomes. I also provide an updated stock analysis and share my fair value estimate of TGT. In essence, I'm committing to buy TGT at less than $62, or at a discount of about 20% to fair value.
Please feel free to leave comments on this article either at Seeking Alpha or here, on my blog. I'll do my best to respond to each comment as quickly as possible.