I sold 4 BVF Oct08 15 Covered Calls for a net deposit in my taxable account.

This is another one that I had been chasing  trying to get a premium/strike price combination that was a little better that the current bid.  It finally hit last Friday.

BVF pays a good dividend, currently 12.42%, and a so-so premium.  I own this lot of BVF at $12.54 so would be okay if it were called away at 15 but I would probably try to roll it out if I thought that looked like a real risk.  I like owning stocks that pay dividends and collecting the additional income through Covered Call premium.

Yesterday I was assigned 4 BVF Jul08 20 Puts in my taxable account.

BVF is trading at 12.33 as I write this.  This assignment is not as bad as it appears because I have rolled out the puts a few times making my basis $12.81 in these shares.  BVF also pays approximately a 12.8% dividend.  I am currently chasing a $15 Oct Covered Call, trying to get another .05 per share on the option.  I tried it yesterday but did not get my price.  If I don’t get what I want today I will probably accept the lower price sometime tomorrow just so I can quit thinking about it.

I will probably keep BVF and sell the Covered Calls as long as I can.  I also own 600 shares in two of my IRA accounts.

This morning I BTC 7 AUY May08 15 Covered Calls and STO 7 AUY Jun08 15 Covered Calls for a net deposit of $461.53 in 3 IRA accounts.

I own these AUY shares from 7.76 to 10.64 so would have been okay if they were called away in May08 at 15 but as I said in my previous post on BVF I like selling Covered Calls on stocks I already own even if I need to roll them out occasionally.  In this case, the annualized return of the additional premium is quite nice at more than 54% on shares I own at $10.64 and even greater on the others.  Wouldn’t it be nice if I actually earn my entire purchase price in premiums resulting in a basis of zero (or below zero) on this stock.  My annualized premium percentage would then be infinite.