Options Update: December 2020 (Part 2)

This is Part 2 of my final Options Update article of 2020. In these updates, I keep track of options trades and provide a running tally of DivGro's options income to date.

After failing to achieve my 2020 goal of collecting at least $24,000 in options income, in December, I executed several trades to improve my options portfolio for the coming year. I'm setting the same options income goal for 2021.

Part 1 covered 23 trades in which I rolled forward options. In Part 2, I'm presenting some closing trades as well as new covered calls and put contracts. Finally, Part 3 will present assignments, expired options,  and a list of upcoming expiring options. 

Recap

In December, I closed five options early and had two assignments and fifteen expirations. Additionally, I rolled forward 23 options and had 29 income-generating trades:

Closed Options

When an out of the money option goes further out of the money, you can close the option early and secure most of the options income.

#555	2020-11-30	:	-2	×	GILD 19 Feb 2021 $70.00 C	$       114.00	( $        -56.74 )
#525	2020-09-21	:	-2	×	PSX 15 Jan 2021 $75.00 C	$       164.00	( $      -167.10 )
#503	2020-08-21	:	-8	×	AAPL 15 Jan 2021 $75.00 P	$       731.00	( $        -91.72 )
#495	2020-07-23	:	-2	×	WFC 15 Jan 2021 $32.50 C	$       220.00	( $        -59.97 )
#493	2020-07-23	:	-1	×	SPG 15 Jan 2021 $100.00 C	$       232.00	( $        -31.88 )

I closed five options in December, mostly related to some tax-loss harvesting trades I executed on 30 December. The exception is the closing trade of AAPL puts:

On 11 December, Apple Inc (AAPL) traded around $122 per share, about 63% above the $75 puts I'd sold earlier. With the options so deep in the money, I decided to roll forward four of these options (see Part 1) and to close the remaining eight options. The trade secured about $639 in options income. 

I closed my position Gilead Sciences, Inc (GILD) to harvest tax losses and, consequently, also closed the related covered calls. The trade secured about $57 in options income. 

Similarly, I closed my position in Phillips 66 (PSX) to harvest tax losses and needed to buy back the related covered calls. The trade cost me about $3 in secured options income. 

Finally, I closed my positions in Wells Fargo & Company (WFC) and Simon Property Group, Inc (SPG) and bought back the related covered calls. The trades secured options income of about $160 and about $200, respectively.

In all, the five closing trades secured $1,053 in options income. 

Covered Calls

Selling covered calls is a way to collect extra income on stocks you already own.

I sold the following covered calls in December:

#613	2020-12-30	:	-1	×	HRL 18 Jun 2021 $52.50 C	$         83.00	( $          -1.09 )
#603	2020-12-18	:	-3	×	PFE 19 Mar 2021 $50.00 C	$       108.00	( $          -2.21 )
#593	2020-12-18	:	-3	×	KO 19 Mar 2021 $60.00 C	$         99.00	( $          -1.31 )

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#613 : 2020-12-30: Sold to Open 1 Contract of Option HRL Jun 18 2021 52.50 C

I own 100 shares of Hormel Foods Corporation (HRL) at a cost basis of $40.66 per share. I'm willing to sell these shares for $52.50 on or before 18 June:

Open Date :  2020-12-30     Expiration Date :  2021-06-18     Number of Days in Trade :  170 Cost Basis :  $40.66 per share Gain at Strike Price :  29.12% Strike Price :  $52.50 per share Number of Contracts : 1 Number of Shares : 100 Call Premium :  $0.83 per share Options Income :  $83.00     Commission :  -$1.09 Net Premium :  $0.819 per share Net Options Income :  $81.91 Options Yield :  2.01% Annualized Options Yield :  4.33% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $39.82 Gain if Exercised :  31.85%

This covered call yields 2.01%, or 4.33% on an annualized basis. The yield on cost of my HRL position is 2.41%, so I'm boosting dividend income by a factor of 1.80. If the option is exercised, I'll sell 100 shares of HRL at a reduced cost basis of $39.82 per share, for capital gains of 31.85%.

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#603 : 2020-12-18: Sold to Open 3 Contracts of Option PFE Mar 19 2021 50.00 C

I own 300 shares of Pfizer Inc (PFE) at a cost basis of $37.05 per share. I'm willing to sell these shares for $50.00 on or before 19 March:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Cost Basis :  $37.05 per share Gain at Strike Price :  34.95% Strike Price :  $50.00 per share Number of Contracts : 3 Number of Shares : 300 Call Premium :  $0.36 per share Options Income :  $108.00     Commission :  -$2.21 Net Premium :  $0.353 per share Net Options Income :  $105.79 Options Yield :  0.95% Annualized Options Yield :  3.82% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $36.68 Gain if Exercised :  36.30%

This covered call yields 0.95%, or 3.82% on an annualized basis. The yield on cost of my PFE position is 4.21%, so I'm boosting dividend income by a factor of 0.91. If the options are exercised, I'll sell 300 shares of PFE at a reduced cost basis of $36.68 per share, for capital gains of 36.30%.

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#593 : 2020-12-18: Sold to Open 3 Contracts of Option KO Mar 19 2021 60.00 C

I own 300 shares of The Coca-Cola Company (KO) at a cost basis of $45.10 per share. I'm willing to sell these shares for $60.00 on or before 19 March:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Cost Basis :  $45.10 per share Gain at Strike Price :  33.04% Strike Price :  $60.00 per share Number of Contracts : 3 Number of Shares : 300 Call Premium :  $0.33 per share Options Income :  $99.00     Commission :  -$1.31 Net Premium :  $0.326 per share Net Options Income :  $97.69 Options Yield :  0.72% Annualized Options Yield :  2.90% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $44.77 Gain if Exercised :  34.03%

This covered call yields 0.72%, or 2.90% on an annualized basis. The yield on cost of my KO position is 3.64%, so I'm boosting dividend income by a factor of 0.80. If the options are exercised, I'll sell 300 shares of KO at a reduced cost basis of $44.77 per share, for capital gains of 34.03%.

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For covered calls, I think an achievable goal is to earn double the dividend yield. Unfortunately, none of these covered call trades achieve this goal, though I'll earn capital gains of more than 30% on each covered call if they were to be assigned. 

These covered calls generated about $285 in options income.

New Put Contracts

Selling put options allows me to set the price I'm willing to pay for a stock I want to buy. In effect, I get paid while waiting for the share price to drop!

I sold the following put contracts in December:

#612	2020-12-18	:	-3	×	XEL 19 Mar 2021 $55.00 P	$       135.00	( $          -0.04 )
#611	2020-12-18	:	-1	×	WMT 18 Jun 2021 $120.00 P	$       224.00	( $          -0.79 )
#610	2020-12-18	:	-3	×	WFC 19 Feb 2021 $25.00 P	$       147.00	( $          -1.61 )
#609	2020-12-18	:	-1	×	V 18 Jun 2021 $160.00 P	$       260.00	( $          -0.79 )
#607	2020-12-18	:	-2	×	SPG 19 Feb 2021 $70.00 P	$       260.00	( $          -0.88 )
#604	2020-12-18	:	-2	×	PG 18 Jun 2021 $100.00 P	$       146.00	( $          -0.87 )
#602	2020-12-18	:	-2	×	PEG 18 Jun 2021 $45.00 P	$       200.00	( $          -0.02 )
#601	2020-12-18	:	-2	×	O 19 Feb 2021 $55.00 P	$       180.00	( $          -0.22 )
#600	2020-12-18	:	-2	×	NKE 16 Apr 2021 $95.00 P	$       130.00	( $          -0.87 )
#599	2020-12-18	:	-2	×	MRK 19 Feb 2021 $70.00 P	$       100.00	( $          -0.87 )
#598	2020-12-18	:	-2	×	MDT 21 May 2021 $85.00 P	$       150.00	( $          -0.87 )
#597	2020-12-18	:	-1	×	MCD 19 Mar 2021 $180.00 P	$       145.00	( $          -0.79 )
#596	2020-12-18	:	-2	×	LYB 19 Mar 2021 $65.00 P	$       190.00	( $          -0.12 )
#595	2020-12-18	:	-1	×	LOW 19 Feb 2021 $140.00 P	$       155.00	( $          -0.79 )
#594	2020-12-18	:	-2	×	LLY 16 Jul 2021 $110.00 P	$       190.00	( $          -0.88 )
#592	2020-12-18	:	-2	×	JNJ 18 Jun 2021 $110.00 P	$       192.00	( $          -0.88 )
#590	2020-12-18	:	-3	×	INTC 18 Jun 2021 $32.50 P	$       150.00	( $          -2.21 )
#589	2020-12-18	:	-2	×	HRL 19 Feb 2021 $44.00 P	$       144.00	( $          -0.23 )
#588	2020-12-18	:	-1	×	HD 16 Apr 2021 $215.00 P	$       180.00	( $          -0.79 )
#587	2020-12-18	:	-2	×	EMR 19 Mar 2021 $60.00 P	$         94.00	( $          -0.87 )
#586	2020-12-18	:	-1	×	CVX 19 Feb 2021 $80.00 P	$       282.00	( $          -1.09 )
#585	2020-12-18	:	-3	×	CSCO 16 Apr 2021 $35.00 P	$       129.00	( $          -3.50 )
#582	2020-12-18	:	-2	×	CL 21 May 2021 $65.00 P	$       140.00	( $          -0.87 )
#580	2020-12-18	:	-3	×	BEN 16 Apr 2021 $20.00 P	$       144.00	( $          -0.34 )
#578	2020-12-18	:	-1	×	ADP 21 May 2021 $130.00 P	$       155.00	( $          -0.28 )

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#612 : 2020-12-18: Sold to Open 3 Contracts of Option XEL Mar 19 2021 55.00 P

I'm willing to buy 300 shares of Xcel Energy Inc (XEL) for $55.00 per share on or before 19 March 2021. XEL closed at $65.67 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Price at Close :  $65.67 per share Discount at Strike Price :  16.25% Strike Price :  $55.00 per share Number of Contracts : 3 Number of Shares : 300 Put Premium :  $0.45 per share Options Income :  $135.00     Commission :  -$0.04 Net Premium :  $0.450 per share Net Options Income :  $134.96 Options Yield :  0.69% Annualized Options Yield :  2.75% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $54.55 Discount if Exercised :  16.93%

This put option trade yields 0.69%, or 2.75% on an annualized basis. At $65.67 per share, XEL yields 2.62%, so I'm boosting dividend income by a factor of 1.05. If the options are exercised, I'll buy 300 shares at a cost basis of $54.55 per share, a discount of 16.93%.

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#611 : 2020-12-18: Sold to Open 1 Contract of Option WMT Jun 18 2021 120.00 P

I'm willing to buy 100 shares of Walmart Inc (WMT) for $120.00 per share on or before 18 June 2021. WMT closed at $145.95 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $145.95 per share Discount at Strike Price :  17.78% Strike Price :  $120.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $2.24 per share Options Income :  $224.00     Commission :  -$0.79 Net Premium :  $2.232 per share Net Options Income :  $223.21 Options Yield :  1.53% Annualized Options Yield :  3.07% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $117.75 Discount if Exercised :  19.32%

This put option trade yields 1.53%, or 3.07% on an annualized basis. At $145.95 per share, WMT yields 1.48%, so I'm boosting dividend income by a factor of 2.07. If the option is exercised, I'll buy 100 shares at a cost basis of $117.75 per share, a discount of 19.32%.

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#610 : 2020-12-18: Sold to Open 3 Contracts of Option WFC Feb 19 2021 25.00 P

I'm willing to buy 300 shares of Wells Fargo & Company (WFC) for $25.00 per share on or before 19 February 2021. WFC closed at $29.01 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $29.01 per share Discount at Strike Price :  13.82% Strike Price :  $25.00 per share Number of Contracts : 3 Number of Shares : 300 Put Premium :  $0.49 per share Options Income :  $147.00     Commission :  -$1.61 Net Premium :  $0.485 per share Net Options Income :  $145.39 Options Yield :  1.67% Annualized Options Yield :  9.69% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $24.50 Discount if Exercised :  15.53%

This put option trade yields 1.67%, or 9.69% on an annualized basis. At $29.01 per share, WFC yields 1.38%, so I'm boosting dividend income by a factor of 7.02. If the options are exercised, I'll buy 300 shares at a cost basis of $24.50 per share, a discount of 15.53%.

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#609 : 2020-12-18: Sold to Open 1 Contract of Option V Jun 18 2021 160.00 P

I'm willing to buy 100 shares of Visa Inc (V) for $160.00 per share on or before 18 June 2021. V closed at $211.31 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $211.31 per share Discount at Strike Price :  24.28% Strike Price :  $160.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $2.60 per share Options Income :  $260.00     Commission :  -$0.79 Net Premium :  $2.592 per share Net Options Income :  $259.21 Options Yield :  1.23% Annualized Options Yield :  2.46% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $157.39 Discount if Exercised :  25.52%

This put option trade yields 1.23%, or 2.46% on an annualized basis. At $211.31 per share, V yields 0.61%, so I'm boosting dividend income by a factor of 4.06. If the option is exercised, I'll buy 100 shares at a cost basis of $157.39 per share, a discount of 25.52%.

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#607 : 2020-12-18: Sold to Open 2 Contracts of Option SPG Feb 19 2021 70.00 P

I'm willing to buy 200 shares of Simon Property Group, Inc (SPG) for $70.00 per share on or before 19 February 2021. SPG closed at $84.10 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $84.10 per share Discount at Strike Price :  16.77% Strike Price :  $70.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $1.30 per share Options Income :  $260.00     Commission :  -$0.88 Net Premium :  $1.296 per share Net Options Income :  $259.12 Options Yield :  1.54% Annualized Options Yield :  8.93% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $68.70 Discount if Exercised :  18.32%

This put option trade yields 1.54%, or 8.93% on an annualized basis. At $84.10 per share, SPG yields 6.18%, so I'm boosting dividend income by a factor of 1.44. If the options are exercised, I'll buy 200 shares at a cost basis of $68.70 per share, a discount of 18.32%.

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#604 : 2020-12-18: Sold to Open 2 Contracts of Option PG Jun 18 2021 100.00 P

I'm willing to buy 200 shares of The Procter & Gamble Company (PG) for $100.00 per share on or before 18 June 2021. PG closed at $139.04 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $139.04 per share Discount at Strike Price :  28.08% Strike Price :  $100.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.73 per share Options Income :  $146.00     Commission :  -$0.87 Net Premium :  $0.726 per share Net Options Income :  $145.13 Options Yield :  0.52% Annualized Options Yield :  1.05% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $99.27 Discount if Exercised :  28.61%

This put option trade yields 0.52%, or 1.05% on an annualized basis. At $139.04 per share, PG yields 2.27%, so I'm boosting dividend income by a factor of 0.46. If the options are exercised, I'll buy 200 shares at a cost basis of $99.27 per share, a discount of 28.61%.

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#602 : 2020-12-18: Sold to Open 2 Contracts of Option PEG Jun 18 2021 45.00 P

I'm willing to buy 200 shares of Public Service Enterprise Group Incorporated (PEG) for $45.00 per share on or before 18 June 2021. PEG closed at $56.82 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $56.82 per share Discount at Strike Price :  20.80% Strike Price :  $45.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $1.00 per share Options Income :  $200.00     Commission :  -$0.02 Net Premium :  $1.000 per share Net Options Income :  $199.98 Options Yield :  1.76% Annualized Options Yield :  3.53% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $44.00 Discount if Exercised :  22.56%

This put option trade yields 1.76%, or 3.53% on an annualized basis. At $56.82 per share, PEG yields 3.45%, so I'm boosting dividend income by a factor of 1.02. If the options are exercised, I'll buy 200 shares at a cost basis of $44.00 per share, a discount of 22.56%.

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#601 : 2020-12-18: Sold to Open 2 Contracts of Option O Feb 19 2021 55.00 P

I'm willing to buy 200 shares of Realty Income Corporation (O) for $55.00 per share on or before 19 February 2021. O closed at $59.52 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $59.52 per share Discount at Strike Price :  7.59% Strike Price :  $55.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.90 per share Options Income :  $180.00     Commission :  -$0.22 Net Premium :  $0.899 per share Net Options Income :  $179.78 Options Yield :  1.51% Annualized Options Yield :  8.76% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $54.10 Discount if Exercised :  9.11%

This put option trade yields 1.51%, or 8.76% on an annualized basis. At $59.52 per share, O yields 4.73%, so I'm boosting dividend income by a factor of 1.85. If the options are exercised, I'll buy 200 shares at a cost basis of $54.10 per share, a discount of 9.11%.

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#600 : 2020-12-18: Sold to Open 2 Contracts of Option NKE Apr 16 2021 95.00 P

I'm willing to buy 200 shares of NIKE, Inc (NKE) for $95.00 per share on or before 16 April 2021. NKE closed at $137.28 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-04-16     Number of Days in Trade :  119 Price at Close :  $137.28 per share Discount at Strike Price :  30.80% Strike Price :  $95.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.65 per share Options Income :  $130.00     Commission :  -$0.87 Net Premium :  $0.646 per share Net Options Income :  $129.13 Options Yield :  0.47% Annualized Options Yield :  1.44% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $94.35 Discount if Exercised :  31.28%

This put option trade yields 0.47%, or 1.44% on an annualized basis. At $137.28 per share, NKE yields 0.80%, so I'm boosting dividend income by a factor of 1.80. If the options are exercised, I'll buy 200 shares at a cost basis of $94.35 per share, a discount of 31.28%.

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#599 : 2020-12-18: Sold to Open 2 Contracts of Option MRK Feb 19 2021 70.00 P

I'm willing to buy 200 shares of Merck & Co., Inc (MRK) for $70.00 per share on or before 19 February 2021. MRK closed at $79.53 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $79.53 per share Discount at Strike Price :  11.98% Strike Price :  $70.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.50 per share Options Income :  $100.00     Commission :  -$0.87 Net Premium :  $0.496 per share Net Options Income :  $99.13 Options Yield :  0.62% Annualized Options Yield :  3.61% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $69.50 Discount if Exercised :  12.62%

This put option trade yields 0.62%, or 3.61% on an annualized basis. At $79.53 per share, MRK yields 3.27%, so I'm boosting dividend income by a factor of 1.11. If the options are exercised, I'll buy 200 shares at a cost basis of $69.50 per share, a discount of 12.62%.

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#598 : 2020-12-18: Sold to Open 2 Contracts of Option MDT May 21 2021 85.00 P

I'm willing to buy 200 shares of Medtronic plc (MDT) for $85.00 per share on or before 21 May 2021. MDT closed at $116.71 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-05-21     Number of Days in Trade :  154 Price at Close :  $116.71 per share Discount at Strike Price :  27.17% Strike Price :  $85.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.75 per share Options Income :  $150.00     Commission :  -$0.87 Net Premium :  $0.746 per share Net Options Income :  $149.13 Options Yield :  0.64% Annualized Options Yield :  1.52% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $84.25 Discount if Exercised :  27.82%

This put option trade yields 0.64%, or 1.52% on an annualized basis. At $116.71 per share, MDT yields 1.99%, so I'm boosting dividend income by a factor of 0.76. If the options are exercised, I'll buy 200 shares at a cost basis of $84.25 per share, a discount of 27.82%.

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#597 : 2020-12-18: Sold to Open 1 Contract of Option MCD Mar 19 2021 180.00 P

I'm willing to buy 100 shares of McDonald's Corporation (MCD) for $180.00 per share on or before 19 March 2021. MCD closed at $215.08 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Price at Close :  $215.08 per share Discount at Strike Price :  16.31% Strike Price :  $180.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $1.45 per share Options Income :  $145.00     Commission :  -$0.79 Net Premium :  $1.442 per share Net Options Income :  $144.21 Options Yield :  0.67% Annualized Options Yield :  2.69% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $178.54 Discount if Exercised :  16.99%

This put option trade yields 0.67%, or 2.69% on an annualized basis. At $215.08 per share, MCD yields 2.40%, so I'm boosting dividend income by a factor of 1.12. If the option is exercised, I'll buy 100 shares at a cost basis of $178.54 per share, a discount of 16.99%.

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#596 : 2020-12-18: Sold to Open 2 Contracts of Option LYB Mar 19 2021 65.00 P

I'm willing to buy 200 shares of LyondellBasell Industries N.V. (LYB) for $65.00 per share on or before 19 March 2021. LYB closed at $90.93 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Price at Close :  $90.93 per share Discount at Strike Price :  28.52% Strike Price :  $65.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.95 per share Options Income :  $190.00     Commission :  -$0.12 Net Premium :  $0.949 per share Net Options Income :  $189.88 Options Yield :  1.04% Annualized Options Yield :  4.19% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $64.05 Discount if Exercised :  29.56%

This put option trade yields 1.04%, or 4.19% on an annualized basis. At $90.93 per share, LYB yields 4.62%, so I'm boosting dividend income by a factor of 0.91. If the options are exercised, I'll buy 200 shares at a cost basis of $64.05 per share, a discount of 29.56%.

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#595 : 2020-12-18: Sold to Open 1 Contract of Option LOW Feb 19 2021 140.00 P

I'm willing to buy 100 shares of Lowe's Companies, Inc (LOW) for $140.00 per share on or before 19 February 2021. LOW closed at $163.20 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $163.20 per share Discount at Strike Price :  14.22% Strike Price :  $140.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $1.55 per share Options Income :  $155.00     Commission :  -$0.79 Net Premium :  $1.542 per share Net Options Income :  $154.21 Options Yield :  0.94% Annualized Options Yield :  5.48% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $138.44 Discount if Exercised :  15.17%

This put option trade yields 0.94%, or 5.48% on an annualized basis. At $163.20 per share, LOW yields 1.47%, so I'm boosting dividend income by a factor of 3.73. If the option is exercised, I'll buy 100 shares at a cost basis of $138.44 per share, a discount of 15.17%.

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#594 : 2020-12-18: Sold to Open 2 Contracts of Option LLY Jul 16 2021 110.00 P

I'm willing to buy 200 shares of Eli Lilly and Company (LLY) for $110.00 per share on or before 16 July 2021. LLY closed at $171.40 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-07-16     Number of Days in Trade :  210 Price at Close :  $171.40 per share Discount at Strike Price :  35.82% Strike Price :  $110.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.95 per share Options Income :  $190.00     Commission :  -$0.88 Net Premium :  $0.946 per share Net Options Income :  $189.12 Options Yield :  0.55% Annualized Options Yield :  0.96% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $109.05 Discount if Exercised :  36.38%

This put option trade yields 0.55%, or 0.96% on an annualized basis. At $171.40 per share, LLY yields 1.98%, so I'm boosting dividend income by a factor of 0.48. If the options are exercised, I'll buy 200 shares at a cost basis of $109.05 per share, a discount of 36.38%.

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#592 : 2020-12-18: Sold to Open 2 Contracts of Option JNJ Jun 18 2021 110.00 P

I'm willing to buy 200 shares of Johnson & Johnson (JNJ) for $110.00 per share on or before 18 June 2021. JNJ closed at $154.51 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $154.51 per share Discount at Strike Price :  28.81% Strike Price :  $110.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.96 per share Options Income :  $192.00     Commission :  -$0.88 Net Premium :  $0.956 per share Net Options Income :  $191.12 Options Yield :  0.62% Annualized Options Yield :  1.24% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $109.04 Discount if Exercised :  29.43%

This put option trade yields 0.62%, or 1.24% on an annualized basis. At $154.51 per share, JNJ yields 2.61%, so I'm boosting dividend income by a factor of 0.47. If the options are exercised, I'll buy 200 shares at a cost basis of $109.04 per share, a discount of 29.43%.

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#590 : 2020-12-18: Sold to Open 3 Contracts of Option INTC Jun 18 2021 32.50 P

I'm willing to buy 300 shares of Intel Corporation (INTC) for $32.50 per share on or before 18 June 2021. INTC closed at $47.46 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-06-18     Number of Days in Trade :  182 Price at Close :  $47.46 per share Discount at Strike Price :  31.52% Strike Price :  $32.50 per share Number of Contracts : 3 Number of Shares : 300 Put Premium :  $0.50 per share Options Income :  $150.00     Commission :  -$2.21 Net Premium :  $0.493 per share Net Options Income :  $147.79 Options Yield :  1.04% Annualized Options Yield :  2.08% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $31.99 Discount if Exercised :  32.59%

This put option trade yields 1.04%, or 2.08% on an annualized basis. At $47.46 per share, INTC yields 2.78%, so I'm boosting dividend income by a factor of 0.75. If the options are exercised, I'll buy 300 shares at a cost basis of $31.99 per share, a discount of 32.59%.

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#589 : 2020-12-18: Sold to Open 2 Contracts of Option HRL Feb 19 2021 44.00 P

I'm willing to buy 200 shares of Hormel Foods Corporation (HRL) for $44.00 per share on or before 19 February 2021. HRL closed at $47.94 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $47.94 per share Discount at Strike Price :  8.22% Strike Price :  $44.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.72 per share Options Income :  $144.00     Commission :  -$0.23 Net Premium :  $0.719 per share Net Options Income :  $143.77 Options Yield :  1.50% Annualized Options Yield :  8.69% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $43.28 Discount if Exercised :  9.72%

This put option trade yields 1.50%, or 8.69% on an annualized basis. At $47.94 per share, HRL yields 2.04%, so I'm boosting dividend income by a factor of 4.25. If the options are exercised, I'll buy 200 shares at a cost basis of $43.28 per share, a discount of 9.72%.

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#588 : 2020-12-18: Sold to Open 1 Contract of Option HD Apr 16 2021 215.00 P

I'm willing to buy 100 shares of The Home Depot, Inc (HD) for $215.00 per share on or before 16 April 2021. HD closed at $270.45 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-04-16     Number of Days in Trade :  119 Price at Close :  $270.45 per share Discount at Strike Price :  20.50% Strike Price :  $215.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $1.80 per share Options Income :  $180.00     Commission :  -$0.79 Net Premium :  $1.792 per share Net Options Income :  $179.21 Options Yield :  0.66% Annualized Options Yield :  2.03% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $213.19 Discount if Exercised :  21.17%

This put option trade yields 0.66%, or 2.03% on an annualized basis. At $270.45 per share, HD yields 2.22%, so I'm boosting dividend income by a factor of 0.92. If the option is exercised, I'll buy 100 shares at a cost basis of $213.19 per share, a discount of 21.17%.

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#587 : 2020-12-18: Sold to Open 2 Contracts of Option EMR Mar 19 2021 60.00 P

I'm willing to buy 200 shares of Emerson Electric Co (EMR) for $60.00 per share on or before 19 March 2021. EMR closed at $80.90 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-03-19     Number of Days in Trade :  91 Price at Close :  $80.90 per share Discount at Strike Price :  25.83% Strike Price :  $60.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.47 per share Options Income :  $94.00     Commission :  -$0.87 Net Premium :  $0.466 per share Net Options Income :  $93.13 Options Yield :  0.58% Annualized Options Yield :  2.31% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $59.53 Discount if Exercised :  26.42%

This put option trade yields 0.58%, or 2.31% on an annualized basis. At $80.90 per share, EMR yields 2.50%, so I'm boosting dividend income by a factor of 0.93. If the options are exercised, I'll buy 200 shares at a cost basis of $59.53 per share, a discount of 26.42%.

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#586 : 2020-12-18: Sold to Open 1 Contract of Option CVX Feb 19 2021 80.00 P

I'm willing to buy 100 shares of Chevron Corporation (CVX) for $80.00 per share on or before 19 February 2021. CVX closed at $87.19 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-02-19     Number of Days in Trade :  63 Price at Close :  $87.19 per share Discount at Strike Price :  8.25% Strike Price :  $80.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $2.82 per share Options Income :  $282.00     Commission :  -$1.09 Net Premium :  $2.809 per share Net Options Income :  $280.91 Options Yield :  3.22% Annualized Options Yield :  18.68% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $77.17 Discount if Exercised :  11.49%

This put option trade yields 3.22%, or 18.68% on an annualized basis. At $87.19 per share, CVX yields 5.92%, so I'm boosting dividend income by a factor of 3.16. If the option is exercised, I'll buy 100 shares at a cost basis of $77.17 per share, a discount of 11.49%.

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#585 : 2020-12-18: Sold to Open 3 Contracts of Option CSCO Apr 16 2021 35.00 P

I'm willing to buy 300 shares of Cisco Systems, Inc (CSCO) for $35.00 per share on or before 16 April 2021. CSCO closed at $45.44 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-04-16     Number of Days in Trade :  119 Price at Close :  $45.44 per share Discount at Strike Price :  22.98% Strike Price :  $35.00 per share Number of Contracts : 3 Number of Shares : 300 Put Premium :  $0.43 per share Options Income :  $129.00     Commission :  -$3.50 Net Premium :  $0.418 per share Net Options Income :  $125.50 Options Yield :  0.92% Annualized Options Yield :  2.83% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $34.56 Discount if Exercised :  23.95%

This put option trade yields 0.92%, or 2.83% on an annualized basis. At $45.44 per share, CSCO yields 3.17%, so I'm boosting dividend income by a factor of 0.89. If the options are exercised, I'll buy 300 shares at a cost basis of $34.56 per share, a discount of 23.95%.

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#582 : 2020-12-18: Sold to Open 2 Contracts of Option CL May 21 2021 65.00 P

I'm willing to buy 200 shares of Colgate-Palmolive Company (CL) for $65.00 per share on or before 21 May 2021. CL closed at $85.93 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-05-21     Number of Days in Trade :  154 Price at Close :  $85.93 per share Discount at Strike Price :  24.36% Strike Price :  $65.00 per share Number of Contracts : 2 Number of Shares : 200 Put Premium :  $0.70 per share Options Income :  $140.00     Commission :  -$0.87 Net Premium :  $0.696 per share Net Options Income :  $139.13 Options Yield :  0.81% Annualized Options Yield :  1.92% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $64.30 Discount if Exercised :  25.18%

This put option trade yields 0.81%, or 1.92% on an annualized basis. At $85.93 per share, CL yields 2.05%, so I'm boosting dividend income by a factor of 0.94. If the options are exercised, I'll buy 200 shares at a cost basis of $64.30 per share, a discount of 25.18%.

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#580 : 2020-12-18: Sold to Open 3 Contracts of Option BEN Apr 16 2021 20.00 P

I'm willing to buy 300 shares of Franklin Resources, Inc (BEN) for $20.00 per share on or before 16 April 2021. BEN closed at $25.01 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-04-16     Number of Days in Trade :  119 Price at Close :  $25.01 per share Discount at Strike Price :  20.03% Strike Price :  $20.00 per share Number of Contracts : 3 Number of Shares : 300 Put Premium :  $0.48 per share Options Income :  $144.00     Commission :  -$0.34 Net Premium :  $0.479 per share Net Options Income :  $143.66 Options Yield :  1.91% Annualized Options Yield :  5.88% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $19.52 Discount if Exercised :  21.96%

This put option trade yields 1.91%, or 5.88% on an annualized basis. At $25.01 per share, BEN yields 4.48%, so I'm boosting dividend income by a factor of 1.31. If the options are exercised, I'll buy 300 shares at a cost basis of $19.52 per share, a discount of 21.96%.

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#578 : 2020-12-18: Sold to Open 1 Contract of Option ADP May 21 2021 130.00 P

I'm willing to buy 100 shares of Automatic Data Processing, Inc (ADP) for $130.00 per share on or before 21 May 2021. ADP closed at $179.24 per share on the date of my trade:

Open Date :  2020-12-18     Expiration Date :  2021-05-21     Number of Days in Trade :  154 Price at Close :  $179.24 per share Discount at Strike Price :  27.47% Strike Price :  $130.00 per share Number of Contracts : 1 Number of Shares : 100 Put Premium :  $1.55 per share Options Income :  $155.00     Commission :  -$0.28 Net Premium :  $1.547 per share Net Options Income :  $154.72 Options Yield :  0.86% Annualized Options Yield :  2.05% ----------------------------   --------------------- -------------------------------   -----------     Commission if Exercised :  $0.00 Cost Basis if Exercised :  $128.45 Discount if Exercised :  28.34%

This put option trade yields 0.86%, or 2.05% on an annualized basis. At $179.24 per share, ADP yields 2.08%, so I'm boosting dividend income by a factor of 0.99. If the option is exercised, I'll buy 100 shares at a cost basis of $128.45 per share, a discount of 28.34%.

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For selling puts, I like to see a dividend boost factor of 5.00 or more unless I can buy shares at a discount of at least 10%. All but one of these put trades measure up to that criterium!

These put options trades generated about $4201 in options income.

Concluding Remarks

After failing to achieve my 2020 goal of collecting at least $24,000 in options income, in December, I executed many trades to improve my options portfolio for the coming year. 

Part 1 of this article covered 23 trades in which I rolled forward options.

In Part 2, I presented closing trades as well as new covered calls and put contracts. The closing traadee secured $1,053 in options income, while the new covered calls aand put contracts generated options income totaling about $4,487. 

Part 3 will conclude this article by presenting two assignments, fifteen expirations, and the usual list of upcoming options expirations. 

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