On 7/19/10, 3 CKR Sep10 12.50 Calls were executed and the shares were sold from an IRA account as 12.55 per share.  My basis for these CKR shares was 15.93, excluding dividends received. 

I only accidently noticed that these shares had been called away when I was doing some research in my account.  For whatever reason, E*Trade does not provide an alert when shares are sold as a result of a merger or reorganization, which is what happened in this case.  I’m pretty sure I lost money on these shares, even after dividends are considered but because I have not always kept track of the dividends received I don’t really know for sure.  I only know that I’ve received 30 cents per share since the beginning of 2009.

CKR was taken private.  The last I looked the offer was at 11.50 per share so I was surprised to see that I actually received 12.55 per share.  I sold the Sep10 12.50 Calls back in Mar10.  Maybe getting the higher price had something to do with that but I don’t really know.

I find that I am not doing a good job of reporting my new option sales for the week right after option expiration each month.  It just hangs over me and for one reason or another I don’t get it done in a timely manner.  To help solve that problem for me I am trying this new bulk format where I only make comment on those trades that seem to require additional comment.

Beginning on Monday, March 22, 2010, after the Mar10 Options expired I began to sell new Options for Apr10 and beyond.  Below is a picture of my new transactions so far.  I have additional transactions to make and will write about them as they occur.

I have written about most of the underlying stocks before so most of these transactions do not require additional comment.  For the Covered Calls transactions I generally select strike prices that I feel give me the best chance of the underlying stock not being called away.  For the Put transactions I generally select strike prices that I feel give me the best chance of the underlying stock not being assigned to me.  In some cases I don’t care if the stock is called away or put to me or some other situation is worth mentioning about the transaction.  I note those cases below.

The 3 CKR Sep10 Covered Calls at 12.50 are probably going to expire worthless if they even make it to September.  CKR has received and accepted an offer to go private at a price of $11.05.  CKR has the right to continue to search for better offers. 

DSX is already above the $15 strike price I sold for April.  $15 has appeared to be resistance going back to July of 2009 with a couple of higher peaks of around $18 and $16.50 in Nov and Jan.  DSX is certainly capable of being above $15 by April expiration just as it is capable of being below $15 at that time.  I chose the April expiration date because I was not real comfortable with where DSX might be going and the $15 strike price because I wanted to get a better option premium. I might need to roll the DSX Calls out to September if I want to do so at a profit.

I sold the AA Oct10 16 Covered Calls and the AA Oct10 14 Puts with the thought that AA would probably be above 14 in October but if not I could add some additional shares and reduce my basis for my total AA holdings.  If AA turns out to be above $16 in October I will need to roll it out simply because my basis is well above $16.

I have sold NYX Covered Calls at the $30 strike on 5 prior occasions since Jul09.  They have expired worthless each time.  NYX seems to have a hard time getting above, or staying above, $30.  I sold the current Calls only one month out because I am a little nervous about where it is going and did not want to be exposed very long to that strike

Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends happen on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $960.53 in dividends in my various accounts for 2010.

I have recently received notice of the following dividends paid in various IRA accounts for a total of $97.00:

This quarter marks the return of FCX dividends for the first time since October 2008.  The dividend is not near the prior levels of around .50 per quarter but is a positive sign nevertheless.

I use my basis per share, excluding dividends, to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio.  My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.