ABT - New Position

A new dividend position was established today on Abbott Laboratories (ABT). The following is the trade information, including IB commissions:

29-Jun-09 - Initial Stock Position - BTO 100 ABT @ 47.77
29-Jun-09 - Initial Call Option - STO 1 Jul09 47.00 Call @ 1.37
15-Aug-09 - Dividend Received - DIV 100 Dividend @ 0.40

Abbott Laboratories is a fundamentally solid wide moat company, with 10 consecutive years of positive cash flow, and 36 consecutive years of dividend increases. They declared a quarterly dividend on 6/12 of $0.40, with ex-dividend date on 7/15, payable on 8/15.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CC trade to capture the dividend, since it had a slightly better profit than the CSP.

Summary without the dividend if called early the day before Ex-Dividend date:

Stock Investment: $4,777.00
Income Generated: $137.00
Percent Income Generated: 2.87%
Annualized Income Generated: 65.42%
Net Profit If Called: $60.00
Percent Return If Called: 1.26%
Annualized Return If Called: 28.65%
Days Held to Ex-Dividend Date: 16 days

Summary with the dividend if called at option expiration:

Stock Investment: $4,777.00
Income Generated: $177.00
Percent Income Generated: 3.71%
Annualized Income Generated: 75.13%
Net Profit If Called: $100.00
Percent Return If Called: 2.09%
Annualized Return If Called: 42.45%
Days Held to Expiration: 18 days

Dividend Information:

Ex-Dividend Date: 07/15/09
Dividend Pay Date: 08/15/09
Dividend Rate: $1.60 ($0.40/quarter)
Dividend Yield on Cost: 3.35%