Today, 5/21/12, I sold 4 HPQ Nov12 $29 Covered Calls for a net deposit of $96.94 in an IRA account.  My basis for these HPQ shares is now $27.95.  This transaction represents a simple return of about .86% and an annualized return of about 1.74% on my prior basis with 180 days to expiration.

I decided to sell the Nov12 option because the nearer term options did not have sufficient premium to make them worthwhile at the $29 strike price.  This is tying up a lost of cash in this account but there is nothing for it unless I want to take a loss at this time…which I do not want to do.  A little patience and these shares will be back to where I need them to be.

Holding HPQ until November will have the small benefit of collecting some additional dividends.  HPQ is recently increased its dividend to .132 per quarter from a previous .12 per quarter.  An increasing dividend is generally a good thing. 

S&P continues a 12-month price target of $29 and has a Hold recommendation on HPQ.  MarketEdge has a price opinion of $24.51 and a Neutral recommendation.  The 22 Yahoo Brokers have a 12-month price target of $29.23 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, 5/21/12, I sold 1 FCX Jul12 $39 Covered Call in my taxable Account for a net deposit of $12.24.  My basis for these FCX shares is now $37.19.  This transaction represents a simple return of about .33% and annualized return of about 1.96%.

This is the next in a continuing series of Covered Call transactions on FCX shares that I purchased and upon which I am selling Covered Calls with the intent that they be called away.  In this case, I acquired these FCX shares when my Apr12 $38 Put was assigned to me.  I decided to sell the $39 Call to make a little extra when the shares are eventually called away from me.  I would like to be selling weekly Calls but FCX is just not cooperating right now.

These FCX trades have worked quite well for me so far.  The Covered Calls sometimes expire worthless (not my original intent) but FCX is volatile enough that I am confident that I will eventually sell them at a profit. As long as I can continue to sell near term Covered Calls above my acquisition price I do not care if they are ever called away. 

S&P currently has a 12-month price target of $46 on FCX with a Buy recommendation.  MarketEdge continues a price opinion of $38.56 and an Avoid recommendation.  The 19 Yahoo analysts have a 1-year price target of $52.86 and a 1.8 recommendation where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 5/21/12, I sold 3 Jun12 $14 Covered Calls for a net deposit of $43.73 in an IRA account.  This transaction represents a simple return of about .94% and an annualized return of about 13.23% with 26 days left to expiration.  My basis for these ANR shares in is now $15.28.

I wanted to sell the weekly $16 Covered Call but there was just no money in it at this time.  As it is, I had to go down to the $14 strike to be able to sell the Jun12 Calls at a reasonable rate.  These Calls leave me underwater on these ANR shares so I don’t want them called away just yet.  I am making a small bet here that ANR will not recover above $14 in the next month and that these Calls will expire worthless.  I can then sell the Covered Calls on these shares at least one more time.  If necessary, I will be able to roll these Calls out and up.

ANR does not pay a dividend so these ANR shares are most definitely a trade and not an investment.  S&P has a 12-month price target of $18 and a hold recommendation on ANR.  MarketEdge has a price opinion of $13.16 and an Avoid recommendation.  The 23 Yahoo analysts covering ANR are more optimistic with a 12-month price target of $21.78 and a recommendation of 2.1 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.