This morning I BTC 6 DIVX May08 7.50 Calls, 2 each in my taxable account and 2 IRA accounts, for a net cost of $449.49 to each account.

I sold these calls in early April after watching the stock fall to the low 6 range.  It looked like it would languish there for awhile and the 7.50 Calls would be safe (expire worthless).  Then DIVX reported increased earnings and sales and it started to climb and actually gaped up at one point.  I was rather expecting that it would fall back again but to no avail.  The stock is at $9.44 as I write this and still methodically climbing to somewhere.  I these DIVX lots at various prices from 16.24 to 20.84 so am happy that the stock is recovering even though I took a hit on the options today.  If this continues I should be able to sell new Calls at the $15 strike price or better with a reasonable premium thus making my BTC today worthwhile.

This morning I BTC 1 TIE May08 17.50 Covered Calls and STO 1 TIE Dec08 22.50 Covered Call for a deposit of $42.51 in my taxable account.

I don’t normally like to sell Covered Calls so far out and for such a small premium but I wanted to roll up enough to provide some additional room for the stock to continue moving up.  The 22.50 strike price may not be enough but by December I should be able to roll it out and maybe up again.

The market is moving so fast in some areas that I can’t seem to keep up with it.  After April 2008 expiration I sold Covered Calls on several stocks at strike prices that I thought would allow them to expire worthless.  I was expecting the market to continue moving essentially sideways.  TIE is one example that did not behave as expected causing me to roll out and up.  Yesterday it was AA, MNST and NYX.  Again today I see that NYX has already moved ahead of my new strike price.  I have the same situation with DIVX but have not dealt with it yet.   In this case I need to call the broker (E*Trade) because for some reason (they gave me a reason but it sounded lame) they will not allow on-line trades on DIVX options.  With the exception of AA the other stocks I felt compelled to take action because my basis is below the strike price.  I am never happy just getting out of a stock with a loss when I can attempt to “fix” it with options.

Yesterday I sold 2 DIVX May08 7.50 Calls in each of two IRA accounts and my taxable account.  I deposited $70.50 into each account.

What can I say about DIVX?  I am disappointed to say the least in its recent price performance.  I own these DIVX shares from the high 15’s to low 18’s so don’t really want then called away at the 7.50 strike.  I had calls at 15 and 17.50 strike prices on these lots that expired in March.  I held off selling calls again to see if the stock would recover some.  It does not appear now that it is going to anytime soon, at least not until after the April expiration.