Yesterday, Aug 24, 2010, I sold 3 ZQK Feb11 5 Covered Calls for a net deposit of $62.71 in my taxable account.  My basis for these ZQK shares is now 11.11.  This transaction represents a simple return of about 1.7% and an annualized return of about 3.5% on my basis.

I don’t have much to say about ZQK.  I have been disappointed with it and will exit it at some point and probably never own it again.  A big reason for that is that ZQK does not pay a dividend and as you know by now I have a strong bias toward dividend paying stocks.  The other reason is that the options don’t yield very much, at least not at this time.

I chose the $5 strike price simply because it was above the current price.  I notice that there appear to be fewer analysts following ZQK that there had been.  For instance, S&P does not appear to have a current evaluation on it.  Those analysts that are covering ZQK all have a neutral rating on it at this time.  MarketEdge currently has a price opinion of $4.47 for ZQK.  If they are right I should be able to continue to sell the $5 strikes or roll out my existing Calls at the same strike for awhile, each time reducing my basis by a few cents.