T Stock was added to my portfolio for the first time in 2011 and was a solid performer for the year. T Stock put trades added $3606.25 of income towards my total 2011 earnings of $163,456.00. If I deduct my SPY PUT hedge 2011 earnings, my total income from put trades in 2011 was $87,825.00. Therefore T Stock trades provided 4.1% of that entire total!
T Stock Plan For 2012
I believe that T Stock is undervalued and should be trading above $33.00. With this in mind my goal remains the same for T Stock. I will sell puts until I accept assignment of T Stock shares. I will then sell covered calls, but stretch them out so as to also try to pick up the quarterly dividend. Then once exercised out of my stock through covered calls, I will repeat the cycle. If or once T Stock moves into fair value I will be more careful to stay out of the money. If T Stock becomes over-valued, which I think may happen this year, I will sell further out of the money puts so as not to be assigned shares at over-valued prices. If the premiums do not warrant selling, should the stock move higher, I will end put selling in T Stock and move on to another stock while waiting for T Stock to fall in price. Select this T Stock link to review AT&T Investor Relations
T Stock Chart 2009 to 2011
The chart below shows the past 3 years in T Stock. You can see the gradual climb in T Stock valuation. In 2011 the Stock hit an intraday high of $31.94. The low for much of 2011 was in the $27.50 range. This made put selling straight forward in T Stock. During the period when the stock rose, I held off selling puts. You can review the 2011 T Stock trades through this link.
Unless this trend changes this year, which I believe it will by T Stock moving higher, the best premiums are going to be in the $29 and $28 put strikes. Based on the past performance both of those put strikes have a very good chance, if the stock falls and I get assigned shares, that I can sell covered calls and be exercised back out.
T Stock Chart For 2009 to 2011 Shows The Gradual Climb In Valuation
| Review T Stock Trades For 2011 review USA Stock Portfolio for 2012 T Stock Trades For 2012Current T Stock Status – Year 2Capital Currently In Use: $32020.00 |
|
| Date | Stock At Time Of Trade |
Action Taken (All Figures Are US Dollars) | Comm. | Shares Held |
Capital In Use |
Gain/Loss | Total Income |
| Dec 16 2011 | 28.85 | Final Trade for 2011 was: Sold 10 Naked Puts 21JAN12 $27 for .24 (status: expired) | 19.50 | 24019.50 | 220.50 | 3606.25 | |
| END OF 2011 TRADES | |||||||
| Jan 6 2012 | 29.68 | Sold 10 Naked Puts 18FEB12 $29 @ .44 (status: expired) Comments: I am not concerned about being assigned shares in T Stock at these levels. I believe T Stock is undervalued and is stuck in a trading range that makes a compelling case for put selling. Read more about the Jan 6 2012 T Stock trade. |
19.50 | 29013.25 | 420.50 | 4026.75 | |
| Jan 20 2012 | 30.51 | Jan Options Expiry: 10 Naked Puts $27 expired | |||||
| Jan 30 3012 | 29.20 | Bought 1000 T Stock at $29.20 (status: sold $33) | 7.00 | 1000 | (29207.00) | ||
| Jan 30 2012 | 29.20 | Sold 10 Naked Puts 18FEB12 $29 for .32 (status: expired) | 19.50 | 29019.50 | 300.50 | 4327.25 | |
| Jan 30 2012 | 29.20 | Sold 20 Naked Puts 17MAR12 $29 for .53 (status: expired) | 32.00 | 58032.00 | 1028.00 | 5355.25 | |
| Jan 31 2012 | 29.42 | Bought 1000 T Stock for $29.42 (status: Sold $33) Comments: I plan to hold these shares for what I believe will be a run to at least $31.00. You can read my comments here. |
7.00 | 2000 | (29427.00) | ||
| Jan 31 2012 | 29.42 | Sold 10 Naked Puts 17MAR12 $29.00 for .47 (status: expired) | 19.50 | 29019.50 | 450.50 | 5805.75 | |
| Feb 10 2012 | 29.80 | Sold 10 Naked Puts 20APR12 $29.00 for .41 Comments: I believe T Stock is going to push higher from here and this may be my last chance for a while to sell the $29 put strike. With my Feb 29 puts about to expire I have sold out to April since I am already holding March. April could mark the last month of rises in stocks for a while if the sell in May theory holds up again this year. |
19.50 | 29019.50 | 390.50 | 6196.25 | |
| Feb 17 2012 | 30.01 | Feb Options Expiry: 10 Naked Puts $29 expired | |||||
| Mar 16 2012 | 31.59 | March Options Expiry: 10 Naked Puts $29 expired | |||||
| Apr 5 2012 | 30.94 | Dividend 2000 T Stock shares X .44 | 880.00 | 7076.25 | |||
| Apr 10 2012 | 30.00 | Sold 10 Naked Puts 19MAY12 $29 for .28 (status: expired) | 19.50 | 29019.50 | 260.50 | 7336.75 | |
| Apr 20 2012 | 30.86 | Apr Options Expiry: 10 Naked Puts $29 expired | |||||
| Apr 23 2012 | 30.70 | Sold 10 Naked Puts 16JUN12 $29 for .28 cents (status: closed for .02 cents) | 19.50 | 29019.50 | 260.50 | 7597.25 | |
| May 2 2012 | 33.00 | Sold 2000 shares T Stock for $33 | 7.00 | 0 | 65993.00 | 7359.00 | 14956.25 |
| May 18 2012 | 33.66 | May Option Expiry: 10 Naked Puts $29 expired | |||||
| May 22 2012 | 33.54 | Bought To Close 10 Naked Puts 16JUN12 $29 for .02 cents | 19.50 | (39.50) | 14916.75 | ||
| No positions as I believe the stock is fully valued. Will wait for a pullback before doing any more put selling against T Stock | |||||||
| June 25 2012 | 34.88 | Sold 10 Naked Puts T Stock 18AUG12 $34 for .68 (status expired) | 19.50 | 34019.50 | 660.50 | 15577.25 | |
| July 24 2012 | 34.33 | Sold 5 Naked Puts T Stock 22SEP12 $33 for .41 (status expired) | 13.25 | 16513.25 | 191.75 | 15769.00 | |
| Aug 17 2012 | 37.17 | August Options Expiry August $34 naked puts expired | |||||
| Sep 21 2012 | 38.08 | Sept Options Expiry Sep $33 naked puts expired | |||||
| With T Stock over $38 it is very overvalued in my opinion and should pull back to the $35 level before I start more put selling | |||||||
| Oct 1 2012 | 37.75 | Bought 5 Puts 22Dec12 $36 strike for .68 (status: sold for $1.54) Comments: Bought these puts as I believe the stock is setting up for a decline but by buying December I have lots of time to have this trade work out, if I end up being wrong. |
13.25 | (353.25) | |||
| Oct 12 2012 | 35.55 | Sold 5 Naked Puts T Stock 17NOV12 $34 for .34 (status: BTC Nov 13 for .16) |
13.25 | 17013.25 | 156.75 | 15925.75 | |
| Oct 15 2012 | 34.90 | Sold 5 Naked Puts T Stock 22DEC12 $32 for .36 (status: BTC Nov 23 for .09) |
13.25 | 16013.25 | 166.75 | 16092.50 | |
| Oct 15 2012 | 34.90 | Sold 5 Puts 22DEC12 $36 strike for $1.54 | 13.25 | 756.75 | 403.50 | 16496.00 | |
| Nov 9 2012 | 32.85 | Sold 5 Naked Puts T Stock $32 for .74 (note change in Commission rate) | 10.00 | 16010.00 | 360.00 | 16856.00 | |
| Nov 13 2012 | 34.37 | Bought to close 5 Naked Puts 17NOV12 $34 for .16 | 10.00 | (90.00) | 16766.00 | ||
| Nov 19 2012 | 32.90 | Sold 10 Naked Puts T Stock 22DEC12 $33 for $.92 (status: expired) |
15.00 | 33015.00 | 905.00 | 17671.00 | |
| Nov 19 2012 | 32.90 | Sold 5 Naked Puts T Stock 19JAN13 $32 for $1.15 | 10.00 | 16010.00 | 565.00 | 18236.00 | |
| Nov 23 2012 | 34.36 | Buy To Close (BTC) 5 Naked Puts T Stock 22DEC12 $32 for .09 Comments: Read this T Stock article to understand this trade. |
10.00 | (55.00) | 18181.00 | ||
| Dec 21 2012 | 33.67 | Dec Options Expiry 10 naked Puts T Stock $33 expired | |||||
| Dec 21 2012 | 33.67 | Change In T Stock Put Selling Strategy – To understand the change please read this T Stock article. | |||||
| Dec 31 2012 | 33.15 | Sell 5 Naked Puts T Stock 19JAN13 $32 for .36 Comments: The pullback in T Stock means a return of 1% for 3 weeks as long as T Stock stays above $32 To understand this trade please read this article. |
10.00 | 16010.00 | 170.00 | 18351.00 |