The remaining 8 HPQ $29 Puts I had sold were assigned to me over the weekend.  I considered selling Covered Calls at the $29 strike for March, April, May and August.  The greatest percentage returns were for Aug12.  In the end, I decided to sell 4 HPQ $19 Covered Calls, one in each of 4 IRA accounts, for a net deposit of $349.96.  My basis for each of these lots is now $27.85 per share.  These 4 transactions represent a simple return of about 3.09% and an annualized return of about 6.52% with 173 days to expiration.  I then sold 4 HPQ May12 $29 Covered Calls for a net deposit of $128.97 in another IRA account.  My basis for these HPQ shares is now $28.17.  This transaction represents a simple return of about 1.13% and an annualized return of about 5.03% on my prior basis with 82 days to expiration.

I decided to sell the two different expiration months because there was only one lot in four of the accounts.  The trading costs tend to chew up my profits on single contract trades so I wanted to maximize the option premium for those accounts; hence, I sold the four single Aug12 contracts.  I was willing to make a smaller percentage return on the lot of four contracts with the idea that I would either be called away sooner allowing me to reinvest in something else, or that I would be able to sell new Covered Calls on them.

S&P has a 12-month price target of $29 with a Neutral recommendation on HPQ.  MarketEdge has a price opinion of $26.64, down from $28.13 last week, and a Neutral recommendation, down from Long last week.  The 25 Yahoo Analysts have a 12-month price target of $30.60, up modestly from $30.48 last week, and continue a recommendation of 2.6 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 2/24/12, I was assigned 3 HPQ Put contracts in my Taxable Account.  I then sold 3 HPQ Apr12 $29 Covered Calls for a net deposit of $64.72.  My basis for these HPQ is now $28.31.  This transaction represents a simple return of about .76% and an annualized return of about 4.84% on my prior basis with 57 days to expiration.

I was mildly surprised this morning that I was already assigned these HPQ shares.  I expected to own them but not until this weekend.  Oh well, I think it is to my advantage to own them now because I was able to sell Covered Calls on them today rather than on Monday.  I expect to own another 800 shares in 5 IRA accounts by Monday.

HPQ disappointed a couple of days ago when it announced quarterly earnings and gave guidance for the future.  The next day the stock dropped almost $2, which was more than I had anticipated.  The larger than expected drop has caused me to go farther out to April to get a reasonable return on the $29 strike price.  I had originally planned to sell the weekly $29 Calls on these shares but that was not meant to be.  So now, I will definitely collect the .12 quarterly dividend, at least on these 300 shares.

The following price targets will probably change over the next few day because of the recent quarterly results.  Here is what they are for now.  S&P has a 12-month price target of $29 with a Neutral recommendation on HPQ.  MarketEdge has a price opinion of $28.13 and a Long recommendation.  The 25 Yahoo Analysts have a 12-month price target of $30.48 and a recommendation of 2.6 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

My 10 WFC Feb12 $31 Calls (in six accounts) were in the money by .09 as the option period closed and were all called away from me.  I realized a net profit of about $375 during the four weeks that I held the shares.  I held the shares prior to their ex-dividend date so I will also collect and additional $120 in dividends on 3/1/12.

I now need to decide what to do with the new cash in my accounts.  At this time I am inclined to sell the $31 weekly puts expiring next Friday, 2/24/12.  I am also considering some of the other stocks for which weekly options are offered.  Some potential candidates are GE, CSCO, HPQ, INTC and T.  All of these companies also pay a dividend and are currently in the right price range for my accounts.  In fact, GE goes ex-dividend next week on 2/23 and I just might outright purchase the stock to capture the dividend.  The down side to purchasing the stock is that I will then need to go out to March or even April to get a decent net return after trading costs.   I will make a decision on Tuesday morning as I see how the markets start the day.