Yesterday, I bought 100 shares of ANR is each of two IRA accounts. I then sold the March 30, 2012, weekly Covered Call for a net deposit of $11.24 in each account. These transactions represent a simple return of about .55% and an annualized return of about 101.15% with 2 days left to expirations. My basis for these ANR shares in each account is now $14.72.
I was reviewing my existing positions while at the same time looking for an opportunity to put some idle cash to work. I have looked at ANR several times because I am short 2 ANR Jan14 $30 Covered Calls in one of my IRA accounts. I keep thinking I should roll down those Covered Calls because coal is so beaten down with no apparent reason to recover anytime soon. Then I noticed the weekly options on ANR and found them attractive, especially for the weekly trade. I rather expect them to expire worthless tomorrow and that I will be able to continue selling either weekly Covered Calls or, perhaps, sell the April Call at the $15 strike.
ANR does not pay a dividend so these ANR shares are most definitely a trade and not an investment. S&P has a 12-month price target of $19 and a hold recommendation on ANR. MarketEdge has a price opinion of $17.40 and an Avoid recommendation. The 22 Yahoo analysts covering ANR are more optimistic with a 12-month price target of $26.05 and a recommendation of 2.1 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.