December 8th, 2008 at 5:54 pm
On 12/2/08, I sold 2 AMZN Dec08 50 Covered Calls for a net deposit of $162.50 in an IRA account. My basis for these AMZN shares is now 59.62.
AMZN does not pay a dividend so does not fit my current model. It does, however, have pretty good option premiums so I will continue to hold it as long as I can for that reason alone. Of course, since I am currently underwater I will do whatever I can to keep it and sell new Calls until I am at least whole again.
On that note, AMZN move up sharply today and is not above my strike price. I need to watch it for a day or so to see if I can determine if the higher price will hold. If so, I need to roll AMZN out and perhaps up to make sure that it doesn’t get called away before I am through with it. I really wanted to sell at a higher strike price this time thinking that AMZN would benefit from the seasonal sales but was persuaded to sell the lower strike after seeing the sales numbers from the Thanksgiving weekend.
October 28th, 2008 at 4:36 pm
I sold 2 AMZN Nov08 65 Covered Calls on 10/20/08 for a net deposit of $212.50 in an IRA account. My basis for AMZN is now 60.43.
Even though AMZN does not pay a dividend it is one that I will probably try to hold onto just for the option income. Even now, I could BTC my Nov08 65 Calls and roll out and up to Jan09 70 for a positive deposit. That kind of option premium is worth hanging onto, especially because each trade continue to reduce my basis and provide some greater flexibility.
June 27th, 2008 at 3:00 pm
This morning I BTC 2 AMZN Jul08 80 Puts and STO 2 AMZN Oct08 75 Puts for a net deposit of $291.01 in an IRA account. My basis on AMZN would now be $61.49 if put to me at 75.
Rolling out and down generated the additional cash and reduced my potential liability by $1000.
I thought last week my that my AMZN Jul08 80 would probably expire worthless but that idea didn’t last long. AMZN might still recover above 80 but I am not so sure today. In any case, with the current market I am looking at minimizing current exposure by rolling out those stocks that I would prefer not to own right now. Where possible I will be looking at selling a future Put and a lower strike price than my current holding.
