Today I STO 2 DSX Dec09 15 Puts for a net deposit of $98.49 in an IRA account.  If put to me my basis for these shares would be 14.51.

I already own 300 DSX shares with Call options expiring in Dec09.  If put to me these DSX shares would reduce my average basis.  I would then consolidate the 500 shares and sell Covered Calls on the lot.

DSX is not currently paying dividends, having paid their last one in Nov08, so it does not currently meet my general investment guidelines.  The last dividend was .95 per shares.  I expect that DSX will again pay dividends but probably not for a year or so.  I have no special insight, that is just my belief.  In the meantime, I will “create” my own dividend by selling the Covered Calls.

Yesterday, I sold 1 DSX Dec09 17.50 Covered Call for a net deposit of $19.24 in an IRA account.  My basis for these DSX shares is now 15.40.

These are the DSX shares that were put to me 2 days ago.  I have 2 other DSX DSX Covered Call contracts for Dec09 in this same IRA account.  It will be convenient for them all to expire in the same month so that I can write new Covered Calls for all of them at once, reducing my transaction costs.

Also, I wanted to sell the 17.50 strike price which is not only out of the money but above my basis.  It is so nice to be able to sell Calls above my basis now and then.  Anyway, those are the two reasons that I chose that strike price and expiration date and why the premium I collected was so low. 

Today I was Put 1 DSX Sep09 17.50 contract.  My basis for these DSX shares is 15.59

Funny thing, I wanted to roll this DSX Put contract out but have not been able to get to a computer during the time the market has been open.  I could have placed an order in the evening but kept putting it off because I felt like I really had until early next week to do something.  Oh, well I think I am okay owning DSX at my basis anyway.  My basis is about $3 above the current price but it will allow me to average down another 200 shares that I own at a much higher price of 33.62.  DSX moved up a little today.  I think it will be in a position to perform well sometime next year when I think dry bulk shipping should strengthen.