I was assigned 2 AUY Jul08 15 Puts in an IRA account.  I had rolled these contracts out in the past and decided that I would allow them to be put to me this time.  With accumulated option premiums I own these shares at 12.48 which is less than the Friday close of 13.97.

I own 700 other shares of AUY and have done quite nicely by selling Covered Calls on them and collecting the small dividend (recently increased to .01 per month from .01 per quarter).

AUY has been a long time favorite of Jim Cramer which is where I first heard of it and why I began my relationship with it.  I haven’t always done well with Jim’s picks but this one has been good for me.

On Friday (4/18/08) I BTC 2 WFC Jul08 27.50 Covered Calls and STO 2 WFC Oct08 30 Covered Calls for a net deposit of $191.01 in my taxable account.  My basis in these WFC shares is now 25.55.

I continue to hold WFC because of its dividend (Just raised to .34 per quarter) and because of the Covered Calls I can write (sell) on it.  I wrote my current calls a little further out than normal so that I could also raise my strike price thereby earning an additional $500 if I am called away.

Even as I write about holding WFC I am listening to Jim Cramer’s show that I recorded last Monday (7/14).  Jim spoke then about not owning bank stocks today.  He listed several in particular not to own because of their basic fundamental flaws.  Several weeks ago Jim said that WFC is one of the stronger banks.  I am still going with that idea.

This morning I BTC 2 AA Jul08 37.50 Puts and STO 3 AA Oct08 35 Puts for a net deposit of $460.26 in an IRA account.  My basis for AA if assigned would now be 31.16 with the stock currently trading at 34.29.

Notice that I BTC 2 contracts and STO 3 contracts at a lower strike price.  I’ve lowered my strike price by 2.50 and my new basis if assigned by almost 3.00 per share.  At the same time, I increased my potential liability by $3000.  I think this provides me some additional flexibility (cushion) if I need to roll the stock out again, get assigned the stock and sell covered calls on it or sell the stock if assigned.  By the way, if I am assigned these 3 AA contracts I would own 500 AA in this IRA account.  I also have previously sold and have outstanding 4 AA Oct08 40 Puts in my taxable account with a basis of 35.96 if assigned.  I’ll be watching these with the idea of maybe rolling them out sometime next week after options expire this Friday.

My current thought is that if I am assigned these AA shares I will probably hold them and sell Covered Calls while collecting the dividend.  This fits my general investment goals.  Unless there is a tremendous price drop I do not intend to sell any new Puts on AA unless these current Puts expire worthless.