Today, 1/31/12, I BTC 8 AA Apr12 10 Covered Calls and STO 8 AA Jan14 12.00 Covered Calls for a net option premium deposit of $475.87 in an IRA account.  My average basis for these AA shares is now 20.44, excluding dividends received.  These transactions represent a simple yield of about 2.83% and an annualized yield of about 1.44% with 718 days to expiration.

I find this trade a little humorous because I did almost exactly the same thing one year ago.  The only real difference was that I then was rolling up from an Apr11 $16 strike to a Jan12 $17.50.  Of course, I rolled out an extra year this time.  Then, in Aug11, I actually rolled in and down to the Aug11, $13 strike and was able to sell monthly options through Dec11.  Maybe I will be able to do something similar again with these shares.

I made this trade today because AA is ex-dividend tomorrow and I was a little in the money on my prior Covered Calls.  I did not to take the chance that somebody would call my shares away because of the recent run up and to capture the dividend, regardless that it is only 3 cents per share.  I would probably have been okay but decided to go ahead and get the additional cash deposited today and increase my potential called deposit by an additional $1600.

AA has been moving up of late.  The 16 Yahoo Analysts have a mean 12-month price target of $11.40 with a mean recommendation this week (and last week) of 2.5 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.  S&P has a12-month price target of $13.00 with a Buy recommendation.  MarketEdge has a price opinion of $10.43 with a Long recommendation.

AA is one of those companies that reduced it dividend.  Back in February 2009 it paid 17 cents per share and has since reduced that dividend to 3 cents per share, including for the current quarter.  I look forward to the day when the dividend begins to recover.  In the meantime, I expect that I will continue to hold AA and collect the dividends such as they are and collect option premiums.

Today, 1/30/12, I sold 10 WFC Feb12 $31 Calls for a net deposit of $60.41 in 5 IRA Accounts and in my Taxable Account.  My new basis for these FCX varies from $30.36 to $30.71.  These transactions represents simple returns of about .10% to about .27% and annualized returns of about 2.11% to about 5.49% on my potential basis with 18 days to expiration.  I will also collect a .12 dividend on these shares as WFC goes ex-dividend in a couple of days on 2/1/12.

I acquired these shares by design by selling last weeks “weekly” Puts at the $31 strike.  However, WFC fell more than I anticipated last week making the Feb 3, 2012 weekly WFC $31 calls too cheap to generate a positive cash flow.  Even the Feb12 $31 Calls just barely created profits for my single lots.  Even so, I sold the Feb12 $31 Calls because my goal with these shares is to be back to cash as quickly as possible with a profit.  I rather expect that the Feb12 Calls will expire worthless and I will then be able to sell new calls, hopefully the weeklies.

S&P continues a 12-month price target of $33 with a Buy recommendation.  MarketEdge continues a price opinion of $26.07 and has a Long recommendation.  The 30 Yahoo Analysts have a 12-month price target of $34.28 and a recommendation of 2.1 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

I have normally written about my end of month option results the Monday after option expiration.  However, as I find I am selling the weekly options more often I have delayed this post until after the last Friday of the month is past.  Weekly options are indicated by an appended “w” in the Call/Put column.

January is always a busy month for me.  One reason is that I often roll out option contracts to January because they are almost always available as Leaps for one or more years out.  Other times it is just the next available month for which I can either sell new options or roll out.  This January was no exception.

This month I had two sets of Call assignments, both at full term.  The FCX Call assignments were some of my FCX trades that I have been making with the goal of having the shares quickly called away for a profit.  As to the MWW assignment, it was one of four contracts that I had sold.  I had actually expected all four to be called away.  The WFC Put assignment was anticipated and is part of my ongoing attempt to move cash to stock to cash more quickly and at a profit.

All of the rolled out transactions were for a net deposit in the associated account.  Here are the summarized results: 

I include those options that I rolled out or were assigned prior to their expiration date to present a more complete picture of the option transactions that I originally sold for expiration this month.  Weekly options are indicated with a “w” included with the Put or Call designation.

I have already written about any new Option transactions I have made on these expired, assigned or rolled out transaction.  There are still a few for which I have not written new Option contracts.  I will write about them as new contracts are sold.