Today I BTC 4 YHOO Jul09 17 Covered Calls and STO 4 YHOO Aug09 18 Covered Calls for a net deposit of $247.97 in an IRA account.  My basis for these YHOO shares is now 20.77.

I didn’t really want to do these trades but YHOO was moving up nicely after Oppenheimer raised it price target to $19 from $13.25 and maintaining its ”perform” rating on the stock, according to Reuters.  Another news story suggested that MSFT and YHOO are close to a search and online advertising deal which may be made public next week.

I didn’t want to make these trades today because, after watching the price movement for most of the day, I suspected that YHOO would not exceed $17 by market close.  However, I needed to leave my computer an hour before market close and did not want to take the chance that I was wrong.  In the end, I decided that the $28 it cost me for the two trades was well worth the insurance of not losing the stock today.  As it turns out, I made .62 per share on the deal, including  .10 per share buying back the Jul09 Calls.  An investor should always be happy with a profit. 

I should note that YHOO added another .30 in after hours trading, moving up to 17.14.  I have a feeling that I may need to roll out my Aug09 18 Calls before they expire, especially if the MSFT deal turns out to be true.