smsf investment options.., page-2

Hi Telamelo & others

I only had my SMSF for about 4 years now, however have been writting call options on stock for about 10 years.
The premium income that I have been able to generate has on average been returning an ADDITIONAL 10 to 12 percent approx. on funds invested in the SMSF .
I have mainly been using resource & energy related stocks upto recently but switched to about 70% Telstra in May.

The stock that I used a lot to write call options on was Oil Search [ OSH ] I have been in and out of this stock more than a hundred times due to the cycles in oil prices, but got out 100% in May with a very small capital gain, and received traditionally very low dividends along the way and no franking credits.
The excellent call premiums made up for the low divvys.

I am underwater on my BHP stock, slightly under with ANZ but with carefull management continue to write calls against these to generate income.

After selling out of OSH in May I bought TLS @ $3.54 & $3.59, wrote European call options on these out to December12, received exactly $10,000
in call premiums, will collect $14,000 in divvys in Sept. plus the associated franking credits of $6000, and stand to pick up $10,000 in capital gains as I have set the strike prices at $3.61 & $3.71
That adds up to an anticipated return of $40,000 on approx. $357,000 for just over 7 months, the call premiums are lower but this is a dividend play.

Come expiry date in December I either let the stock get called away and bank the capital gain, buy back the options at their current prices and resell to capture the March divvy, or rewrite again if the share price is under the strike prices of $3.61 & $3.71 for each series. ( currently $3.78]

Others that are using options to generate addition income in these trying conditions may care to comment on this play as I always keen to learn from other investors.
Regards Mattocks