Tuesday, September 27, 2016

Boosting Ford's Performance with Options

Founded in 1903 and based in Dearborn, Michigan, Ford Motor Company (F) manufactures and distributes automobiles worldwide. The company has 67 plants across the world and offers vehicles under the Ford and Lincoln brand names. Ford sells its products through distributors and dealers, as well as through dealerships to fleet customers. The company provides vehicle financing products through a wholly owned subsidiary, Ford Motor Credit Company LLC.

I own 600 shares of Ford at an average cost basis of $12.94 per share. As a dividend growth investor, I like Ford for its relatively high yield. I also like the stock because it allows me to boost that yield with covered calls. Ford is a popular stock for options trading – in August, the average daily volume of Ford options totaled nearly 7,200 contracts, about 4,500 of which were call contracts.

To see my stock analysis of Ford as well as the options trades I've executed to boost the performance of my Ford shares, please read this article at Seeking Alpha.

I believe it is possible to earn 10-15% in options income on top of Ford's 4.93% dividend yield, for a total yield of 15-20%. Tripling or quadrupling Ford's dividend yield in this way is an exciting prospect!

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.

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