On 7/21/08 I sold 12 ETFC Oct08 5 Covered Calls for a net deposit of $215 in my taxable account and an IRA account.

I am still underwater in ETFC.  I now own 400 of these shares at 18.63 and 8oo at 17.53.  I keep chipping away at my basis and will probably let these be called away one day.  On the other hand, my return on the remaining invested capital creeps up as my basis creeps down.  It may actually be okay one day if I just keep owning these shares and selling covered calls on them.  I just hope I live that long.  :-)   Sometimes you just need to take a humorous view.

I am still catching up from being on vacation for 17 days so I am still a little behind posting recent activity in my various accounts.  I think I can post everything today.

July has been an okay month for me.  Or was it?  I own 200 shares of IndyMac Bank (IDMC) and used to own 200 shares of Countrywide Financial Corp (CFC).  Of course the CFC is now 36 shares of Bank of America (BAC) which is a little better than CFC. 

As I wrote earlier, I was assigned 300 share of Yamana Gold (AUY) in an IRA account which I am okay with.  As document earlier I rolled out several Jul08 options that I did not want to be assigned or called away.  All of the rest of my Jul08 option positions expired worthless allowing me to keep all of the option premiums.  Here is the list of those options that expired.  Note that the Total Received column may be higher because it is the result of rolling out a prior option.  For example, the AGU Put was originally sold in Dec07 and rolled out three times before it finally expired in Jul08.  The actual net received was 8.72 per share or $1744.  Still not too bad though.  Also, where there are multiple rows for a stock each row represents a separate trading account.

I sold a total of 12 ETFC Julo8 5 Calls, 4 in my taxable account for a deposit of $69 and 8 in an IRA account for a deposit of $146.  My average basis for these lots is $18.80 and $17.71 respectively.

I have written on how and why I own ETFC in earlier posts.  The short answer is that ETFC and I got caught up in the sub-prime mortgage problem and before I knew it I owned it.  Anyway, I continue to own ETFC and sell covered calls because I am earning 19.33% annualized on the 4 in my taxable account and 20.45% annualized on the 8 in my IRA account on the current price of the stock.  I would need to earn that or better to cause me to sell these stocks and move on.  There is always the risk that the stock could continue to decline, be acquired or even go bankrupt.  I don’t think it will bankrupt but it could be acquired.  The bottom for the stock seems to be about 2.50 so it certainly could decline from its current 3.73, it has before.  There appear to be signs that the stock is stabilizing though and may actually recover or at least survive long enough for me to get to a break even point in a few years.