Today, 9/8/10, I Closed 2 BMY Sep10 25 Covered Calls and Sold 2 BMY Mar11 25 Covered Calls for a net deposit of $150.95 in an IRA account.  My basis for these BMY shares is now 23.07, excluding dividends received.  These transactions represent about a 3.17% simple return and an annualized return of about 6.04% on my prior basis.

BMY has been above $25 since late July.  I originally sold the Sep calls in May thinking that BMY might stay below that level.  Obviously I was wrong.  My basis is below the $25 strike price so I could have let it be called away and made a profit.  However, BMY pays a pretty good dividend of 32 cents or at about 4.79% at its current price and about 5.37% on my basis at the last dividend payout in August.  I prefer to continue holding BMY for the dividends and the extra revenue from the option premiums.  At this time I intend to continue rolling out these Covered Calls as long as I can and perhaps roll them up to a higher strike price if I can do so as a net credit transaction.

S&P currently has a 12 month price target on BMY of $30 and a 4 star Buy rating.  MarketEdge has a price opinion of 25.57 and has the equivalent of a Buy rating for BMY.  In fact, as I scan the recommendations of the various analysts available to me, they all have the equivalent of a Buy rating on BMY.  Now, I suppose that might be a bearish signal for a contrarian.  But I guess I am not very concerned with that as long as I continue to receive a decent return on my investment via the dividends and potentially opinion premiums.