Options Update on SMCI,T(ATT),VZ

 In October, I actively pursued income from covered calls and cash-secured puts on AT&T, Verizon, and Super Micro Computer (SMCI). Here’s a breakdown of each trade and the income strategy behind them.

AT&T (T) $23 Call – Expired Worthless

• Trade Date: 10/16/2024
• Premium Collected: $9
• Outcome: Expired worthless on 10/25/2024

With AT&T, I collected a small premium at a strike price above the stock’s near-term range. This call expired worthless, allowing me to capture the full premium. Selling calls on stable stocks like AT&T provides reliable income with manageable risk.

Verizon (VZ) $42.50 Call – Expiring 11/08/2024

• Trade Date: 10/28/2024
• Premium Collected: $24

This call is still open and offers additional premium income if Verizon remains below the strike price. I’ll be monitoring it closely as expiration nears.

Verizon (VZ) $46.00 Call – Expired Worthless

• Trade Date: 10/18/2024
• Premium Collected: $14
• Outcome: Expired worthless on 10/25/2024

The $46.00 Call expired worthless, enabling me to keep the full premium. Like AT&T, this added premium without the need to sell the underlying shares, keeping my cash flow steady.

Super Micro Computer (SMCI) $46.00 PUT – Rolled from $45 PUT

• Trade Date: 10/24/2024
• Premium Collected: $80
• Notes: Rolled from an initial $45 PUT expiring 11/22/2024

I rolled this SMCI PUT to a higher strike, gaining more premium and pushing out expiration. This helps manage risk and lets me potentially buy shares at a discount, should SMCI’s price fall.

October OPTIONS

Date	Call	Option Premium	Notes
10/10/2024	Sell SMCI $40 PUT 10/25	81
10/11/2024	Sell SMCI $40.5 PUT 11/1	55	rolled Sell SMCI $40.5 PUT 11/1
10/14/2024	Sell SMCI $44 PUT 11/8	188	rolled Sell SMCI $40.5 PUT 11/1
10/15/2024	Sell SMCI $44 PUT 11/15	35	rolled Sell SMCI $44 PUT 11/8
10/16/2024	Sell SMCI $45 PUT 11/22	76	rolled Sell SMCI $44 PUT 11/15
10/16/2024	Sell T $23 Call 10/25	9	Expired Worthless and captured Premium
10/28/2024	Sell VZ $42.50 Call 11/08	24
10/18/2024	Sell VX $46.00 Call 10/25	14	Expired Worthless and captured Premium
10/24/2024	Sell SMCI $46.00 put 11/29	80	Rolled Sell SMCI $45 PUT 11/22

Takeaway: Consistent Income Through Options

In total, these trades brought in $127 in premiums, supporting my income-focused strategy. With careful management, including rolling the SMCI PUT, I’ve been able to balance risk with regular cash flow.

This steady income strategy complements my broader portfolio by adding premium income alongside dividend growth. Looking forward, I’ll continue evaluating these positions and reinvesting where I see potential.

SMCI Options

 

SMCI Options: A Strategy Breakdown

Options trading can be a powerful tool for investors looking to enhance portfolio returns and manage risk. Recently, I implemented a strategy by selling PUT options on Super Micro Computer, Inc. (SMCI). In this post, I’ll walk through the rationale behind the trades, the potential outcomes, and how this strategy fits into a broader investment approach.

The Trades:

• 10/10/2024: Sold SMCI $40 PUT expiring on 10/25/2024 for a premium of $81.
• 10/11/2024: Sold SMCI $40.5 PUT expiring on 11/01/2024 for a premium of $55.

Both trades involve collecting premium income while managing the risk of potentially acquiring shares of SMCI at prices lower than their current market value.

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Why SMCI?

SMCI, or Super Micro Computer, Inc., is a company on the cutting edge of high-performance computing and server solutions, benefiting from major tech trends like AI, cloud computing, and data center growth. In 2023 and 2024, SMCI has seen a significant boost in stock price, driven by the strong demand for computing infrastructure in AI development.

Given the volatility and recent upward movement in the tech sector, SMCI presents a prime opportunity for selling options, particularly PUTs. Here’s why:

1. High Volatility: Higher volatility in stocks leads to higher option premiums, which translates into more income for PUT sellers.
2. Growth Potential: If I end up being assigned shares at my strike price, I could own SMCI at a discount to current levels, which is attractive considering the company’s long-term growth potential in AI and data infrastructure.

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Understanding the PUT Options Strategy

What’s a PUT Option?

When selling a PUT option, I’m agreeing to potentially buy 100 shares of the underlying stock (SMCI in this case) at a specific price (the strike price) if the stock falls below that price by the expiration date. In return, I collect a premium upfront, which is my income regardless of the outcome.

Breakdown of My Trades:

1. SMCI $40 PUT, expiring 10/25/2024

   • Premium Collected: $81
   • Breakeven Price: $40 (strike price) - $0.81 (premium) = $39.19
   • Outcome: If SMCI stays above $40 by 10/25, I keep the $81, and the option expires worthless. If it falls below $40, I’m obligated to buy 100 shares of SMCI at an effective price of $39.19.

2. SMCI $40.5 PUT, expiring 11/01/2024

   • Premium Collected: $55
   • Breakeven Price: $40.50 (strike price) - $0.55 (premium) = $39.95
   • Outcome: If SMCI stays above $40.50 by 11/01, I keep the $55. If it drops below $40.50, I buy 100 shares at an effective price of $39.95.

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Potential Scenarios and Outcomes

1. Scenario 1: Both PUTs Expire Worthless
   In the ideal scenario, SMCI’s stock price stays above $40 and $40.50, and neither PUT is exercised. This means:

   • I keep the total premium of $136 ($81 + $55) as profit.
   • I don’t have to buy any shares, leaving my cash available for future trades.

2. Scenario 2: One or Both PUTs Are Assigned
   If SMCI’s stock falls below $40 or $40.50, I’m obligated to buy 100 shares per contract at the strike prices. Here’s the math:

   • For the $40 PUT, my effective purchase price would be $39.19.
   • For the $40.50 PUT, my effective purchase price would be $39.95.

   These prices could represent an attractive entry point into SMCI if I believe in the company’s long-term growth prospects, particularly with its positioning in AI and data center markets.

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Strategic Fit: Income Generation and Risk Management

Selling PUT options like these can be a great way to generate additional income, especially when the stock in question is one I wouldn’t mind owning at a lower price. Here’s how this strategy fits into my broader investment approach:

• Income Generation: The premiums collected act as an income boost, which complements the dividend income from my broader portfolio. In this case, $136 in premium over two trades.
• Risk Management: By selling PUTs, I only buy the stock at prices I’m comfortable with. The breakeven prices of $39.19 and $39.95 are attractive compared to the current market price of SMCI, and I believe the company has strong long-term growth potential.
• Flexibility: If the PUT options expire worthless, I can always re-assess and potentially sell more PUTs or consider a different strategy, like selling CALLs if I own the stock.

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Final Thoughts: Maximizing Returns While Managing Risk

The beauty of selling PUT options lies in the flexibility and income generation it provides. If the stock never dips below the strike price, I keep the premiums without ever needing to buy the shares. If it does, I acquire SMCI at prices I’ve deemed favorable, which could lead to additional gains if the stock appreciates in value over time.

With the rapid advancement of AI and SMCI’s pivotal role in providing the infrastructure to support this revolution, I’m confident that owning shares at an effective price around $40 would be a solid long-term investment. But for now, I’ll monitor the stock and enjoy the premiums as I continue exploring options strategies to complement my portfolio.

Let me know your thoughts and how you’re using options in your strategy!

September 2024 Dividend Analysis: A Solid Performance Across the Board

 September 2024 marked another strong month for my portfolio, showcasing the power of strategic investments and consistent dividend growth

1. Impressive Total Dividends in September 2024

• Total dividends in September 2024: $3,032.04

Crossing the $3,000 threshold for the month is a significant achievement! It reflects the ongoing success of  investments and the strength of the companies in my  portfolio. The continued growth demonstrates  long-term strategy is paying off, leading to meaningful passive income.

2. Standout Performers

Certain stocks stood out this month, contributing heavily to the total dividends:

• Broadcom (AVGO): The tech giant led the charge with a whopping $115.73 in dividends. Broadcom has consistently rewarded investors with its strong growth, and this year is no exception, showing that high-tech can be both growth- and dividend-oriented.

• Discover Financial Services (DFS): DFS delivered an impressive $158.73, showing its strength in financial services. The stock’s consistent growth in dividends highlights its resilience even amid economic uncertainty.

• Lockheed Martin (LMT): Contributing $121.45, LMT continues to be a key player in my portfolio. Defense and aerospace remain robust sectors, and Lockheed Martin’s payout is a testament to this.

3. Consistent Performers Across Sectors

The diversity of  portfolio ensures stability. Several key names contributed strong, stable payouts, reflecting both defensive and growth-oriented strategies:

• Johnson & Johnson (JNJ): JNJ continues to deliver solid returns with $69.45. Its reliability in healthcare has been a bedrock for consistent dividends.

• PepsiCo (PEP): PEP’s $21.41 payout aligns with its historical growth pattern. This consumer giant is known for rewarding shareholders, making it a reliable part of  income stream.

• The Southern Company (SO): With $30.57 in dividends, SO has continued to shine as a steady performer in the utility sector, providing essential services that remain in demand.

4. Challenges and Changes

While the overall portfolio performed well, a few companies faced challenges:

• 3M (MMM): Dividends from 3M saw a sharp decline, dropping to $44.58 from its 2023 highs. This change reflects underlying issues within the company, likely due to restructuring .

• BHP Group (BBL): This year, BHP’s dividends moved to October, impacting the September total. This is a scheduling issue.

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5. Key Takeaways for September 2024

• Crossing $3,000: Achieving more than $3,000 in a single month’s dividends is a huge milestone, showing that my portfolio is maturing into a powerful income generator.

• Broad Strength Across Sectors: With tech (AVGO), financials (DFS), defense (LMT), healthcare (JNJ), and utilities (SO) all contributing meaningfully,  portfolio is well-diversified and balanced.

• Sustaining Long-Term Growth: Despite some challenges, the overall trend remains positive. The diversification of  portfolio continues to serve well and  providing both growth and stability.

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Conclusion: Stay the Course for Continued Success

September 2024 dividends showcase the power of persistence and strategic investment. With more than $3,000 in payouts, we are seeing the fruits of compounding and long term investing. 

Dividend Income Update: Shell & Barclays (BCS)

Investing in dividend-paying stocks continues to be a cornerstone of my financial strategy. This week, I received dividends from two well-established companies: Shell and Barclays (BCS). Here’s a breakdown and some insights into what this means for my portfolio and future growth.

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Dividends Received This Week:

• Shell (SHEL): $46.24
  Shell, a global leader in energy, continues to be a reliable source of dividend income. The company's strong commitment to shareholders is evident in its consistent payouts, and this week I added $46.24 from my Shell holdings. Shell has maintained solid earnings, even during market volatility, making it a core position in my portfolio.

• Barclays (BCS): $18.35
  Barclays, one of the UK's largest financial institutions, deposited $18.35 into my account this week. Though smaller than my Shell dividend, it’s a testament to the power of diversification. Having financial sector exposure through a global player like Barclays helps cushion my portfolio against sector-specific risks.

August Dividends Received 2024

 As we step into the latter half of 2024, it's time to reflect on the dividends received in August and how they compare to previous years. This year has been particularly interesting, with several stocks showing significant changes in their dividend payouts. Let's dive into the details and explore the trends and insights from the August dividends of 2024.

Stock	2020	2021	2022	2023	2024	Difference 2024 -2023
T	104	109.82	62.1	33.18	66.36	33.18
VZ	16.61	23.17	49.48	69.71	85.61	15.9
CVS	23	25.54	28.73	33.66	38.42	4.76
MA	0.52	0.88	4.03	7.65	9.26	1.61
SBUX	11.95	13.29	18.13	22.53	29.42	6.89
WRK	7.05	8.57	10	16.1	18.24	2.14
BMY	0	29.4	48.88	57	62.81	5.81
GD	19.16	29.64	32.11	34.395	37.79	3.395
ABBV	61.36	74.68	87.3	96.75	105.35	8.6
NNN	3.28	3.75	4.07	4.39	4.77	0.38
HRL	10.96	11.61	15.7612	17.07	18.12	1.05
SBUX	8.83	9.73	11.74	13.5	14.8825	1.3825
DE	19.43	23.01	29.21	32.71	39	6.29
AGNC	6.17	6.3	7.39	8.53	9.92	1.39
CAT	52.77	57.11	63.27	69.83	77.08	7.25
RY	8.17	10.22	13.69	14.51	16.01	1.5
AAPL	82.52	88.71	93.29	97.91	102.53	4.62
O	6.22	6.33	7.45	8.06	10.4	2.34
AMP	15.71	17.15	19.28	21.1725	23.56	2.3875
SCHW	0	0	0	10.5	10.5	0
PG	20.86	23.09	26.67	28.17	30.88	2.71
Total	478.57	572	632.5812	697.3275	810.9125	113.585

Year-Over-Year Growth Highlights:

1. 2020-2021 Growth: +19.54%

   • The portfolio grew significantly in 2021 with dividends increasing from $478.57 to $572.00. Notable contributors like T (AT&T) and ABBV (AbbVie) helped drive this growth.

2. 2021-2022 Growth: +10.58%

   • In 2022, the portfolio saw continued growth with dividend increases across key holdings like BMY (Bristol-Myers Squibb) and CAT (Caterpillar).

3. 2022-2023 Growth: +10.23%

   • By 2023, the portfolio showed resilience with steady growth, as dividend payouts from AAPL (Apple) and PG (Procter & Gamble) increased significantly, reflecting the portfolio's stability.

4. 2023-2024 Growth: +16.29%

   • The jump in dividends from $697.33 in 2023 to $810.91 in 2024 is one of the largest gains in recent years. Strong performances from VZ (Verizon) (+$15.90), SBUX (Starbucks) (+$6.89), and CAT (Caterpillar) (+$7.25) were major contributors to this growth.

Key Dividend Performers in 2024:

• VZ (Verizon): Strong growth with a +23% increase, contributing $85.61.
• ABBV (AbbVie): Continued solid growth with an +8.89% increase, adding $105.35.
• SBUX (Starbucks): Added $29.42 with a growth of +30.6%.
• CAT (Caterpillar): An increase of +10.38% with dividends rising to $77.08.

Conclusion:

The consistent dividend growth over the last five years reflects a well-balanced and diversified portfolio. The August 2024 dividends of $810.91 show a remarkable overall growth of +69.45% compared to August 2020. Key contributors, particularly in sectors like telecommunications, healthcare, and consumer goods, have been the driving forces behind this success. As the portfolio continues to grow, the focus on high-quality dividend-paying stocks is paying off, with strong potential for continued growth in the future.

July 2024 Dividend Analysis

 Introduction: July 2024 marked a significant milestone in our dividend portfolio, with total dividends received amounting to $749.59. This represents a substantial year-over-year growth of +27.53%, driven by strong performances from key holdings and the introduction of new contributors.

Key Growth Drivers: One of the standout performers was FXAIX (Fidelity 500 Index Fund), which delivered an impressive $138.38, reflecting robust market conditions. Similarly, MO (Altria Group) continued its strong performance, contributing $84.18. The addition of DOX (Amdocs) was a game-changer, adding $91.25 in its first-ever dividend payout.

Steady Performers: Companies like Coca-Cola (KO) and Realty Income (O) maintained their consistent growth patterns, contributing to the overall increase in dividends. Both companies are known for their reliable dividend policies, which continue to benefit the portfolio.

Challenges and Declines: However, not all was rosy. Ladder Capital (LADR), which had been a consistent contributor in previous years, saw its dividends drop to zero, signaling possible financial challenges. Bank of Nova Scotia (BNS) also showed minimal growth, indicating a more cautious approach in the current economic climate.

SYMBOL	2021 July	2020 July	2022	2023	2024	Difference
KO	9.89	9.17	10.67	11.94	13	1.06
MO	48.88	36.3	56.7	72.21	84.18	11.97
VTR	15.15	15.15	15.64	16.29	16.94	0.65
O	6.31	6.22	7	8.03	10.35	2.32
LADR	4.67	4.07	5.49	6.67	0	-6.67
CSCO	32.82	30.91	35.72	38.9	42	3.1
BNS	41.9	37.69	48.8	48.06	48.88	0.82
NLY	12	12	13.42	10.96	12.59	1.63
CINF	35.65	33	39.87	44.47	49.42	4.95
STWD	56.64	56.64	61.09	67.4	74.12	6.72
AGNC	6.26	6.17	7.31	8.42	9.8	1.38
MO	8.71	7.81	9.79	11.11	12.66	1.55
IRM	6.17	5.74	6.5	6.84	7.47	0.63
FXAIX	90.52	89.45	106.71	113.29	138.38	25.09
DG	4.22	3.6	11.07	13.46	20.68	7.22
STWD	26.45	25.32	28.52	31.44	34.59	3.15
ITW	7.32	6.76	15.71	17.3	18.9	1.6
Fundrise	31.22	16.92	40.2	49.32	50.55	1.23
TROW	155.91		0	0	0	0
DOX	0	0	0	0	91.25	91.25
JPM	9.96	9.9	11.36	11.72	13.83	2.11
	610.65	416.32	531.57	587.83	749.59	161.76

Summary of the Data:

• Total for 2021 July: 610.65
• Total for 2020 July: 416.32
• Total for 2022: 531.57
• Total for 2023: 587.83
• Total for 2024: 749.59
• Total Difference: 161.76

2024 Dividend Goal Progress Summary

As of July 2024, your total dividends received amount to $9,663.29. Here’s how each month has contributed to this impressive figure:

• January: $572.46
• February: $765.00
• March: $3,116.15 (a standout month)
• April: $699.64
• May: $790.46
• June: $2,970.00
• July: $749.59

Key Observations:

1. March and June are the top-performing months so far, with March alone contributing over $3,000 in dividends.
2. June also saw a significant contribution of nearly $3,000, reflecting strong mid-year performance.
3. July marked a smaller increase, but it was still a solid month, adding $749.59 to the total.

Progress Towards 2024 Goal:

Your 2024 goal is 49.56% of your target, with the current total reaching $9,663.29. You’re making steady progress, and with five months left in the year, you’re well on your way to achieving, if not exceeding, your goal.