I sold 2 CFC Jul08 7.50 Calls for $30.50 in my taxable account.  My basis is now 35.66 on this stock.

I written before about CFC and why I own it.  It’s ugly but the way I look at it I am earning 40.79% annualized on the current stock price.  I would need to be able to earn more than that to justify selling the stock and moving on.  The stock isn’t going away just yet and it appears that Bank of America will be buying it for about $7 per share so my downside should be $7.  Does anybody seen something wrong with my reasoning here?

I had a number of Apr08 Options expire worthless allowing me to keep the entire Premium  They are listed below for the record.  Note that the total received may be larger than expected because the option may have been rolled out.

I sold 2 CFC Apr08 7.50 Calls for a net of $30.50 in my taxable account.  My basis for CFC is now $35.81.

You might ask why I own CFC.  It might an indicator of risky behaviour or just bad analysis or bad information.  On hind sight I should have known better but sometime in Mar 2007 (I think) I heard CEO Angelo Mozilo say they were okay and Jim Cramer say that CFC would probably be okay.  I was also suspicious that the sub-prime problem was being a little exaggerated.  I originally sold CFC Jun 40 puts in May 2007.  I had just had May 35 puts expire worthless and felt that I might be correct on CFC.  You probably know the rest of the story.  I rolled the puts out a few times until I was finally assigned in Nov 2007.  I am selling puts now until Bank of America does what ever it is going to do, or not.