Patience paying off on ABT Covered Call/Put Strategy

On April 1 we purchased 100 shares of ABT and established a covered call. At the time we were following the bullish comments of CEO during the Q1 earnings call. Initially the stock increased in price (blue line is stock profit/loss). Unfortunately the optimistic comments from the CEO were premature and the company revised earnings and revenue projections causing the stock to drop. Following the drop we added short puts to the strategy as I didn’t mind buying more shares of the company if we got assigned. Profitability of the puts is represented by the orange line. The stock has slowly climbed back. The positions are currently generating a profit of $1,237 between the stock, options and dividends.

Current option position – naked on 3 short puts (Sep 17 $123).

We have also collected $90 in dividends. Overall return is 11.2% or 32% annualized.

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