On 12/20/11, my 2 PM Jan13 55 Covered Calls in an IRA account were assigned away from me.  My basis for these 200 shares was $44.39, excluding dividends received.  After execution costs, my profit on these shares is about $2,101.00 plus $1,350.50 in dividends.  I have owned these shares since April 2008.

PM went ex-dividend on 12/20/11, so these shares were called away so that somebody could collect the dividend.  I would have liked to continue holding PM because of the dividend (6.94% on my basis as of the prior payout in October 2011) and for the option premiums from selling Covered Calls.  However, the stock price rose high enough that I could not roll the Jan13 Calls out for a net credit transaction.

I may purchase PM again in the future but will wait for it to pull back before I do.  In the meantime, I will deploy the new cash in this in something else.

Today, 5/12/11, I was assigned 2 BALT Jun11 12.50 Puts and STO 2 Sep11 7.50 Covered Calls in an IRA account.  The sale of the Covered Calls resulted in a deposit of $48.48 into the account.  My basis for these BALT shares is now 11.38.  The Covered Call transaction yields a simple return on my prior basis of about 2.08% and an annualized return of about 5.94%.

I had been attempting to roll out the Jun11 Puts for a net deposit but was not able to get it to happen before I was assigned the stock.  I briefly debated about just selling BALT and taking the loss but decided instead to sell the Covered Calls and begin to collect some dividends, assuming that BALT will continue to pay dividends.  BALT was ex-dividend yesterday, 5/11/11.

BALT is a dry bulk shipper.  I already own 500 share of Diana Shipping (DSX) which is also a dry bulk shipper.  A difference between the two is that BALT is still paying a dividend, currently 6 cents quarterly or about 7.96%, while DSX suspended its dividend after its Nov08 payment.  However, I do expect that DSX will resume paying dividends sometime in the future.  BALT and DSX were both favorably mentioned by a Motley Fool analyst.

I am rolling the dice here by continuing to hold BALT.  There is a lot of negative news about the industry being very over built.  I believe the success of any of the dry bulk shippers depends very much upon an improved world economy.  That will eventually occur of course so the question then becomes which shipper will survive long enough to reap the rewards?

On Friday, 5/6/11 my 2 ACAS May11 7 Covered Calls were assigned.  My 200 shares of ACAS were called away at the $7 strike price.  My basis had been $23.12 so this transaction resulted in a loss to me of about $3224.53 from my basis.

This was not a total surprise to me as ACAS had been rising for awhile and was well over $10 last Friday.  However, I was expecting that it would not be called until the 13th when options expire.  I had already pretty much resigned myself to letting it go because I just could not see a way to roll it out for a net deposit even at the same strike price.

Without going into any detail I will just say that I am glad to be out of ACAS at this time so I can redeploy the cash into assets that provide me with a better return.