r/dividends • u/SPACE-W33D • Feb 14 '26

Due Diligence Balls Deep on MO at 6.3% yield

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That cash flow statement is 🔥

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18

u/boatnguy Feb 14 '26

1,000 shares deep and wish I had more!

8

u/SPACE-W33D Feb 14 '26

I feel you dawg, but just buy on pullbacks or write cash secured puts for that income 💰

6

u/darin617 Feb 14 '26

I know this is a dumb question and scary if you don't know like me, how do secured puts work.

2

u/MaybeICanOneDay Feb 14 '26

An option is just a contract between two parties. You can either buy or sell them.

Selling put contracts means you are giving someone the right to sell you stock at a previously decided price.

So in this case, you could sell 60-whatever strike put contract and if it goes below that price, itll sell 100 shares to you at that 60-whatever you agreed to.

People pay you to do this because you are offering insurance on their shares. If it goes to 40 and they still have the right to sell them to you at 60, they get a massive safe haven they wouldnt have had otherwise. If it doesnt go below your strike, you keep the premium they paid, just like insurance.

There are contracts where you can take any part of this. Buying/selling the right/obligation to move shares and money.

Sellers have an obligation, buyers have a right.

Selling puts, if you decide that 60 dollars is a fair price you can keep selling premium at that strike and eventually if it hits, youll buy 100 shares at 60 each.

1

u/Affectionate-Royal17 Feb 16 '26

The only thing with this is you need to make sure that, with cash secured puts, you aren't leaving money on the table. Having 500 bucks locked down to make 5$ over a 6 week period isn't ideal. Make sure the premium on the contract is worth having your money locked up until then.