Today, I sold 2 ACAS Aug09 5 Covered Calls for a net deposit of $10.49 in an IRA account.  My basis for these ACAS shares is now 23.55, excluding dividends received.

ACAS declared a dividend of 1.07 per share, payable on Aug 7.  Apparently the dividend was declared in order for the company to maintain its tax status as a regulated investment company and eliminate its income tax liability.  This is the company’s first dividend since Jan08.

The news is not good for ACAS.  It was removed from the S&P 500 in Feb09 and defaulted on $2.3 billion of unsecured credit arrangements on Mar 31.  Even with all of that, some analysts have raised their opinion on the company.  So, what to do?  I guess I am somewhat of a gambler so I am going to continue to hold onto ACAS for now, collect the dividends as they may appear and sell Covered Calls from time to time to decrease my basis and add to my cash flow.