5 Dividends For Christmas

Christmas is this Friday and the market will be closed. In addition, the market will close early (1pm ET) on Thursday. But a 3.5 day trading week is no reason not to collect some income.

There are 5 companies with an ex-dividend date this week you may want to consider for a short term covered call (note: this would not result in a qualified dividend). They are:

Altria MO 43.01 Dec 24 0.86
American Tower Corp AMT 219.08 Dec 24 1.21
CME Group CME 182.5 Dec 24 2.50
Philip Morris PM 84.31 Dec 22 1.20
Seagate Tech STX 64.30 Dec 22 0.67

Using the Search->Dividend feature of Born To Sell, we set the expiration to this Thursday (weeklys expire on Thursday because of holiday on Friday) and find:

dividends for Christmas

Because the ex-div date is so close to expiration you run the risk of early assignment. To avoid that, write options that have more time premium, like the following Friday, Dec 31. The option holder is much less likely to exercise early if there is more time premium remaining in the option price.

If we take these 5 symbols and put them into the Watchlist feature and set the expiration date to Dec 31, we find these choices:

dividends for Christmas Dec 31 expiration

And if you want to limit yourself to in-the-money options only (remember, the stock price will be lowered by the amount of the dividend paid the morning of ex-dividend), then:

dividends for Christmas in-the-money

These are not trade recommendations. Just ideas to think about, in the event you want another dividend or two for 2020 (and, yes, the Annual Return If Flat column does factor in the dividend payment as well as the option premium). You should check out each company before investing to see if it’s right for you. Good luck!

Mike Scanlin is the founder of Born To Sell and has been writing covered calls for a long time.