Bank account interest got you down... try this instead.

Add to your put selling income today by selling a covered call. The market action over the last 2 days provides our opportunity to collect more cash on home-improvement retailer Home Depot (HD).

With interest rates on bank deposits practically zero earning income is more important than ever.
One way to improve your situation is selling options on world-class businesses to generate consistent cash payments. Don't settle for less than 2% APR at the bank. Using options safely on the right companies has been generating 2% income every month or two.

Home Depot put selling review.

Home Depot has been hitting new company records for sales and earnings per share with a 10.5% profit margin is more than 60% higher than that of its top competitor, Lowe's (LOW). The stock also trades at a reasonable price with EV/EBITDA of just 13.7.

On July 2, I wrote about selling the August 16, $210 puts for $4.25 or better. You could have collected 2% for agreeing to buy shares of Home Depot at $210 ($4.25 / $210 = 2%). This is a 16% annualized return over a seven-week holding period.

Home Depot shares then preceded to fall in the first half of this month along with the rest of the market. On Friday shares closed below our strike price so we were assigned 100 shares of stock for every put sold at $210 each. Since put option premium was paid up front our true cost basis is ($210 - $4.25) $205.75.

HD stock 2 month price movement is shown in the chart below.

This morning, Home Depot shares are back above our cost basis with an opening price of $206.98. HD covered call is attractive right now with earnings set to be announced tomorrow. Options are usually more expensive close to earnings announcements since shares tend to be more volatile than normal. (This increased cost works in our favor since we are selling the call option.)

Trade details:

Sell to open September 20, $210 covered calls on your Home Depot shares for around $4 or better using a limit order and collect a 1.9% payout on your cost basis. You also may be able to collect the upcoming dividend payment of $1.36 for holding shares through August (sometimes option buyers choose to exercise early to collect the dividend payment in which case you will not receive the dividend.)

At expiration if shares are above $210: you keep the cash payment and sell your shares for $210 each.
Your total return in less than three months is 3.9% or 17.9% annualized. That beats the pants off your savings account.

At expiration if shares are below $210: keep your shares and the income and wait for another covered call opportunity to present itself for additional income.

This world-class business trades at a good price and is a perfect option selling for income stock. Stop suffering at the hands of bank executives and earn more income today.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.