As part of my commitment to keep my readers up to date on my portfolio, I write up short posts describing my transactions. My portfolio is undergoing a bit of a makeover at present, and I think it’s best to walk everyone through the changes from start to finish.
Previously, I was only allowed to trade with options level 1. Every time I sold cash secured puts I had to actually hold the cash in my account to cover the put. So I had about $8,000 sitting around in case either of my puts were exercised. That is all in the past.
I now have options level 2 and a margin account. Now that I have access to margin, I no longer need to have cash sitting around in my account just in case a put is exercised. I’ll write more about margin and puts in a future post. For now, it is sufficient to say that $8,000 just got freed up.
Between the freed up money and my regular investments, I went on a little bit of a shopping spree. Unfortunately, the market is still in overvalued land, which really put a damper on my designs. But I am undaunted. So below are my stock and options transactions.
25 shares of Aflac (AFL)
- Cost basis: $1,259.99 or $50.39 per share
- Yield: 2.78% – a little bit lower yield than I would like for a starting yield. But I think AFL has room for dividend growth and may be undervalued at the moment. Next week, you’ll be treated to a dividend stock analysis of AFL.
- Dividends: $1.40 per share
- This will increase my yearly dividend stream by $35.
60 shares of Microsoft (MSFT)
- Cost basis: $1,689.99 or $28.16 per share
- Yield: 3.26%
- Overall, there are probably better investments than MSFT, but almost all of them are overvalued at the moment. So I grabbed 60 shares of MSFT giving me 100 shares total. Now that I have a full lot (100 shares), I’ll probably stop investing in MSFT for a while. Feel free to check out my analysis of MSFT.
- Dividends: $0.92 per share
- This will increase my yearly dividend stream by $55.2.
100 shares of Wells Fargo (WFC)
- Cost basis: $3,709.99 or $37.09 per share
- Yield: 2.69% – Like AFL, this is a lower starting yield than I would prefer. But I feel that WFC is in a good position to put the spurs to it’s dividends this year or next.
- Dividends: $1.00 per share
- This will increase my yearly dividend stream by $100.
In case anyone is wondering, I am also trying to buy LO and KMI, but the stocks haven’t yet dropped low enough for my limit orders to kick in. If I do manage to initiate positions in either of those stocks, I’ll be sure to report it here.
No, I’m not done yet. It’s been a busy week at my brokerage account
LO Jan 18 2014 40.0 Put – This brought in $394.23.
WFC Jan 18 2014 37.0 Put – This brought in $304.23.
Assuming that these puts don’t get assigned, I’ll wind up either keeping all the money or buying the puts back before expiration for less than I sold them for (pocketing the difference). If the puts do result in assignment, then I’ll have grabbed two good dividend stocks at reasonable prices.
INTC Jan 18 2014 20.0 Put – I bought this put in order to close out the INTC put that I sold back in December. It’s been about 3 months and Intel’s stock price didn’t really move much past the strike price. Since I don’t particularly want to be assigned more INTC, I decided to buy the put back. I paid $156 when I bought the put back. That makes my net gain $63.47, which is an annualized gain of 14.54%.
Disclosure: I am long or short all stocks listed above as indicated.
Readers: What do you think of these purchases?