On 7/23/08, I sold 9 ALSK Jan09 15 Covered Calls for a net deposit of $67.25 in my taxable account and an IRA account.  My basis in ALSK is now 14.72 and 12.48 respectively after considering option premiums and excluding dividends received.

After selling these Covered Calls for such a small premium I began to question why I continued to hold ALSK.  I was able to sell the Jul08 Calls for about 2.5 times as much as the current Calls.  I don’t keep track of a stock’s price when I sell an option but from the chart I can see it was about $2 higher than now.  In both cases I sold options about 6 months out so the higher price in Jan08 accounts for the difference in option premiums.  It is so obvious once I looked.

Even so, why am i keeping ALSK?  It is for the dividends which are .215 per share per quarter or about 7.08% annualized.  The option premiums are a bonus.  Although this is less than my nominal goal of 20% per year I think I am still okay with ALSK because it adds to my annual dividend income and will be easier for my wife to work with if she is left with all of this one day.