Stocks and Options » Covered Call

NYSE Group, Inc. (NYX) – Sold Oct09 Call

Bill — Wed, 02 Sep 2009 18:14:12 +0000

On 8/31/09, I sold 6 NYX Oct09 30 Covered Calls for a net deposit of $417.47 in an IRA account. My basis for these NYX shares is now 69.79, excluding dividends received.

I decided upon the 30 strike price because it looks like a resistance level for NYX. It has approached 30 three times in 2009 and each time as pulled back. Also, with Sep and Oct being traditional worst months of the year for stock prices I thought I’d play that and see if 30 will hold again. If not, I’ll just have to see about rolling it out.

I continue to make headway at reducing my basis by selling Calls on shares I own. For example, I originally purchased NYX at 85, near its high. I’ve collected 15.21 in net option premiums to reduce my basis to the current 69.79. I’ve also collected about two years of dividends. I’m still underwater, but as long as I can keep NYX from being called away I will one day own it way below its then current stock price. That will make this a winning deal for me.

Quiksilver Inc (ZQK) – Sold Feb10 Covered Call

Bill — Wed, 02 Sep 2009 17:55:43 +0000

On 8/31/09, I sold 3 ZQK Feb10 Covered Calls for a net deposit of $47.74 in my taxable account. My basis for these ZQK shares is now 10.03.

ZQK seems to be showing some signs of life again. I read that they were able to negotiate an extension on the maturity of a large line of credit which was due on Jul 31. They are apparently in negotiations for a new, larger 4 year line of credit to replace the existing which they expect to close by the end of September.

Since then, there have been some days with order imbalances on the NYSE on the buy side.

Although these are encouraging signs my goal with ZQK, at least at this point, is to continue selling Covered Calls until I can get it called away above my basis. I would reconsider if at that time the option premiums I am able to generate are in the 20% annualized range. The lower my basis becomes the more likely that may be.

BMY, MWW, BA, BAC, CKR, MO – Rolled Out Aug09 Calls

Bill — Wed, 02 Sep 2009 17:38:31 +0000

I am still struggling with my PC so decided to write a single post to document the Covered Calls that I rolled out on Aug09 Options Expiration Friday. They are already stale but if I don’t get them documented now I’ll never stay caught up. So, here goes:

I rolled all of these Calls out and several of them up. I had to go out farther than I normally like to do in order to make these trades net credits to my accounts.

BTC 2 BMY Aug09 21 Covered Calls and STO 2 BMY Dec09 21 Covered Calls for a net deposit of $106.98 in an IRA account. My basis for these BMY shares is now 19.13, excluding dividends received.

BTC 1 MWW Aug09 15 Covered Call and STO 1 MWW Dec09 17.50 Covered Call for a net deposit of $68.49 in an IRA account. My basis for these MWW shares is now 49.79. There are no dividends for MWW.

BTC 2 BA Aug09 45 Covered Calls and STO 2 BA Nov09 50 Covered Calls for a net deposit of $116.99 in an IRA account. My basis for these BA shares is now 63.41, excluding dividends received.

BTC 5 BAC Aug09 17 Covered Calls and STO 5 BAC Nov09 20 Covered Calls for a net deposit of $172.46 in an IRA account. My basis for these BAC shares is now 23.29, excluding dividends received.

BTC 3 CKR Aug09 10 Covered Calls and STO 3 CKR Mar10 12.50 Covered Calls for a net deposit of $60.49 in an IRA account. My basis for these CKR shares is now 15.98, excluding dividends received.

BTC 2 MO Aug09 18 Covered Calls and STO 2 MO Dec09 19 Covered Calls for a net deposit of $34.99 in an IRA account. My basis for these MO shares is now 35.81, excluding dividends received.

And that concludes the list of Aug09 options that I rolled out rather than allowing the underlying shares to be called away. I live to fight another day. Now I need to write a post about some new trades I’ve made since then.

Yamana Gold Inc. (AUY) – Assigned 2 Jul08 15 Puts

Bill — Sun, 20 Jul 2008 18:08:49 +0000

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.

Wells Fargo & Company Ord Shs (WFC) – Rolled out and up Jul08 Calls

Bill — Sun, 20 Jul 2008 17:37:25 +0000

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.