Dividend Amount: 51 cents
Ex-Dividend Date: June 13, 2012
Beta: 0.52 Strategy: Buy Coca-Cola stock and offer to sell the June $72.50 strike or lower call for 51 cents over the intrinsic value. In almost all cases, I sell the call option first to ensure the stock option leg is complete. If not, after qualifying for the dividend, I will attempt to close out the trade with a gain of near 21 cents, plus the dividend earned. It is important to sell the call option hedge at or near the asking price for at least the minimum amount over intrinsic value. I don't want the option hedge unless the sale will provide at least the minimum 51 cents over intrinsic value. If my shares are called away before trading ex-dividend (resulting from the option buyer wanting the dividend), I gain about 51 cents. The most I can make is $1.02 if I hold the covered call through option expiration day and the stock gets called away. My last step (completed before making a trade on the same day) is to check company announcements and news sources for possible price moving events. This is especially critical during earnings season.