They took my Shares, but I am the Winner. KSS

Playing with options can be fun.  It is more fun when you make money.  I sold a call option against my shares of Kohl’s (KSS), and you can read the original article.  Well, my option was about to expire.  I was surprised to see that they took my shares, but I am the winner.

They took my Shares but I am the Winner
They took my Shares but I am the Winner

What Option did I have fun with?

I sold a call option for $419.95 and it was callable at $40. It was set to expire last Friday.  Somebody actually decided to call the option and they paid us $40 a share.  We lost a little bit on money on the shares.  However, they paid us $419.95 for the right to buy the shares from us.  And, during that time, Kohl’s (KSS) paid us a $55 dividend.  This totaled a net profit of $334.41.  That feels good.

ID Paid Received
Stock -$4,135.50 $3,994.96
Option $0.00 $419.95
Dividend   $55.00
Profit $334.41

 

Including the purchase of the shares and selling the call option, this cost us $3,715.55.  With our $334.41 of profit, we made a 9% profit in about 3 months.  Now that is a great profit and I am the winner.  Sorry about the gloating, but this feels great.


They Took My Shares. What Should I Do?

When I looked at the market on 4/24/17, my shares are actually worth less than what I sold them for, or when those people decided to take them from me.  My shares got sold for $3,994.96 and I bought them back for $3,983.85, including those pesky commissions.  I bought my shares back for $11.11 cheaper, or another way, I made another $11.11.

And we had such fun with the last call option, we decided to sell another.  We sold another call option with a Strike of $40 due in May 19th, 2017.  We received another $179.35

Should We Have Bought Our Shares Back?

While retail is still struggling, they still have a nice 5.5% dividend yield.  Their earnings are still more than enough to cover their dividend payment.  The cash flow is still great.  I do not see any recent news to change my mind.  We are happy to own the dividend stock and they will continue to pay us a nice dividend.

Do you think we should have repurchased our shares of Kohl’s (KSS)?  Do you collect dividends from them?  Join the conversation below in the comment section.

Disclosure: KSS – We own shares and sold a call options

 

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4 thoughts on “They took my Shares, but I am the Winner. KSS

  1. Nice seeing others try options trading. I still haven’t myself but could be fun. Has potential to bring in more income than just dividends. However, you just need to watch the ex-dividend dates to make sure you don’t miss a dividend payment if you are going to be buying and selling. Glad you having fun with it.

    1. I only trade options on 2 dividend stocks, because I am still learning. If I miss a dividend payment, I will count that as the cost of learning. Although, my goal is not for my stock to be called away at all. I will keep you updated with future option trades.
      Having fun with your stocks is important. I enjoy investing, so buying dividend stocks is not work to me, but a great hobby with the potential of making me lots of money and retiring one day.

  2. DM, I hope one day I too will be in a position to be selling calls. When I do get started in stock options, I’ll be pursuing the covered call strategy. I’ve been interested in this for a very long time, but never got to the point where I pull the trigger. But, that is how I am. I think and ponder about a particular strategy for months (if not years).

    My goal is to get a solid foundation in my dividend portfolio. Then, when I feel the time is right, take a spare 2-5k and try my hands at stock options. In the meantime I will continue to read posts like yours about your experiences. It keeps me inspired and motivated.

    1. I like the idea of starting small. Even if the comission will eat up all of the possible profit, staying small will stop a big loss. Lossing some money is sometimes the cost of an education. College cost money, training cost money.
      I am not saying what you should do. What I did to start learning about options is to buy a couple cheap out of the money options. That way, when I lost all of my money invested, it was small, and I learned how the system works. I hate to lose even $50, but what I learned was worth much more than that .

      Good luck to you. I wish you tons of investing success. DM

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