Today I BTC 2 TOL Jan09 30 Puts and STO 2 TOL Jan10 30 Puts for a net deposit of $401.00 in my taxable account.  My basis for these TOL shares would now be 23.88 if put to me today.

With my potential basis at 23.88 and TOL currently trading at 22.98 as I write this I would be in pretty good shape is somebody actually put TOL to me now.  TOL doesn’t pay a dividend but as long as this margin account doesn’t require me to sell the stock right away I would probably hold on to TOL and sell Covered Calls on it to generate additional revenue for the account.  For example, I could sell the TOL Dec08 25 Call for 1.80 right now.  That would net me about another $350 into the account.

I sold 2 VLCK Nov08 7.50 Covered Calls on 10/22/08 for a net deposit of $90.50 in my taxable account.  My basis for these VLCK shares is now 22.50.

Of course, VLCK does not pay a dividend so I am not even paid for waiting for its price to recover (if it ever does).  So I just chip away at my basis by selling Covered Calls.  I would normally have sold a higher strike price a little further out but, as I’ve said earlier, I needed to raise additional cash in my taxable account to help satisfy a margin call.  As it is, VCLK has already moved above and then fell below the 7.50 strike price just last Friday.  I will need to go out to Jun09 if I want to roll VCLK out and up to a 10 strike price.  We’ll see what happens when trading resumes tomorrow and how, if at all, the election changes things.

I sold 2 BRCD Jan09 4 Covered Calls on 10/22/08 for a net deposit of $34.50 in my taxable account.  My basis for these BRCD shares is now 8.52.

BRCD does not pay a dividend so I am just chipping away at my basis until I can sell it, hopefully at something above my basis.  However, BRCD has been moving up lately so the 4 strike price may be in jeopardy.  Why is it moving up?  Well, a rising tide (market) raises all ships (stocks), or something like that.  In addition, BRCD just reduced the price it will pay for Foundry Networks (FDRY) by $400 million and somebody (I think it was APPL) recently announced that BRCD would be a major (sole?) supplier for one of their products.  I am pretty sure I heard that on CNBC last week.