Double Down On Dividends With These 2 Covered Calls

Pfizer Inc. (NYSE:PFE)

Pfizer Inc. (NYSE:PFE) is another stock that will never set the world on fire from a growth perspective, but it does have defensive qualities and pays a juicy 3.94% dividend.

The stock has been trading between $27.50 and $37 in recent times and is currently smack bang in the middle of that range at $32.50.

Implied volatility is currently around 20%, having been as low as 12.5% and as high as 25% in the last year.

Traders wanting to increase the yield from their portfolio could sell an April 21^st $33 call for $0.89 which would add another 10.5% per annum income potential to the holding.

Options trading involves risk and is not suitable for some investors. Check with your financial advisor before making any investment decisions.

Disclosure: I do not currently have any positions in VZ or PFE

About the author: Gavin has a Masters in Applied Finance and Investment. He specializes in income trading using options, is very conservative in his style and believes patience in waiting for the best setups is the key to successful trading. He likes to focus on short volatility strategies. Gavin has written 5 books on options trading, 3 of which were bestsellers. You can read more from Gavin at Options Trading IQ.