Today, 4/19/10, I sold 5 DSX Sep10 17.50 Covered Calls for a net deposit of $176.17 in 2 IRA accounts, 3 in one account and 2 in the other.  My basis for these DSX shares is now 26.78 and 13.74 respectively, excluding dividends received.

My Apr10 DSX Covered Calls were written at the 15 strike price.  It was touch and go for me on Friday afternoon as I watched DSX move around just below $15.  I was prepared to let those shares that owned a little under 15 be called away but did not want the others called away just yet.  In the end, DSX closed just a few pennies below $15 allowing me to once again sell Covered Calls on all of them.

I chose to go a little farther out in order to increase my strike price up to the 17.50 level.  I considered selling the 15 strike once again but in the end decided to take a smaller premium in exchange for the higher strike.

My thoughts about DSX have not changed since my last posting in March.  I repeat below what I wrote then.

DSX last paid dividends in 4th quarter of 2008.  It had been increasing its dividends each quarter with the last one being .95.  I am hopeful and expect that dividends will resume as the world economy recovers.  In the mean time I will continue to sell Covered Calls to “make my own dividend”. 

To some degree I think DSX is an extension of Warren Buffet’s purchasing railroads.  If the railroads are going to move coal, foreign steel and grains then there needs to be dry bulk shippers to move those same products across the oceans.  That is what DSX does.

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

On 12/28/09, I sold 5 DSX Mar10 17.50 Covered Calls in 2 IRA accounts for a net deposit of $151.23.  My basis for these DSX shares is now 27.30 for 300 shares and 14.22 for 2oo shares, excluding dividends received.

DSX last paid dividends in 4th quarter of 2008.  It had been increasing its dividends each quarter with the last one being .95.  I am hopeful and expect that dividends will resume as the world economy recovers.  In the mean time I will continue to sell Covered Calls to “make my own dividend” .

To some degree DSX is an extension of Warren Buffet’s purchasing railroads.  If the railroads are going to move coal, foreign steel and grains then there needs to be dry bulk shippers to move those same products across the oceans.  That is what DSX does.