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  1. #1
    Member
    Join Date
    Jan 2017
    Location
    Fairview, NC
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    84

    Call options and utilities


    Back a summer ago a man I know introduced me to stocks that are regulated by the US Government and
    call options of mostly electric companies. These utilities are REGULATED. by the US Government thus offering some protections. You can Google the whole list and there are many to choose from.

    Duke and Southern are currently paying a yield of 5% or so.

    A contract is 100 shares and you then sell a call on the contract for a future date. Right now 6 months out is good. Currently Duke Electric call option for January 2019 at $85.00 will get you $150 per contract of 100 shares. On top of that is the 4.95% dividends or yield on a annual basis. Then if someone calls it and takes it at your agreed 85$$ price you made another $4.00 or more on the difference of today’s closing price of nearly $81 and the price if call in Jan of $85.. another $400. At that point your 100 shares sold and you have $8500 in your account minus brokerage fees.

    When you add the yield to what you are paid to sell the buyer of your stocks in the future it can add up to real $$$. This can go above 10% plus any increase in price.

    Read up on it. There are many online brokerage firms and the fees vary.

  2. Stocks/Investments Moderator boneil's Avatar
    Join Date
    Jul 2010
    Location
    Aberdeen, MD
    Posts
    12,140
    #2
    I have always thought selling covered calls was good way to make a little more money. Also, its a good way to protect profits.
    Thanos was the hero

  3. #3
    I do it occasionally to generate a little extra income. I also sell cash secured puts on stocks I want to own

  4. Member
    Join Date
    Nov 2011
    Location
    Coral Springs, Florida
    Posts
    10,761
    #4
    There is a CEF that has a utilities covered call fund. BUI by black rock. Its a little expensive now but if it drops to a big discount I may pick it up.