Yesterday, 4/20/12 I BTC 2 ETFC Apr12 $10 Covered Calls and STO 2 ETFC Oct12 $11 Covered Calls for a net deposit of $84.97 in an IRA account.  My basis for these ETFC shares is now $84.55.  This transaction represents a simple return of about .50% and an annualized return of about 1.00% on my prior basis.  Not a great return by any means but it felt better than just outright selling the stock at this time.  Another way to look at this is that this transaction represents a simple return of about 4.05% and an annualized return of about 8.13% on the current value of my ETFC shares.  In other words, I would need to have a return that high or higher before it would make sense to sell ETFC and move the money elsewhere.  The alternative investment analysis is always worth considering before just dumping a stock and moving on…at least in my opinion.

I selected the Oct12 expiration month because it allowed me to roll the strike price up by $1 for a net credit transaction.  I determined to use the $11 strike based upon the various analyst 12 month price opinions and because it presented a reasonable premium without going much farther out.  I am tending to place a little more value on the Yahoo Analyst’s average recommendation.  I am confident that I can roll these Calls out and up if necessary.

ETFC did a reverse 1:10 stock split in June 2010, which is the reason that my basis is so high per share.  As a result of the split I went from owning 800 shares to 80 shares of ETFC.  I pondered just outright selling the remaining 80 shares for awhile.  However, with all of the apparently good news on ETFC at the time, I decided to purchase an additional 20 shares in July 2010 to bring my holdings in this account to 100 so that I can continue to sell Covered Calls.  The new shares were purchased at a net cost of $15 per share.  I then added 100 shares at 16.20 as the result of a Put assignment, which reduced my average basis considerably. So as along as I can sell Covered Calls above the $16 strike price, I will probably continue to do so…except that I sold below that this time…again.  I even contemplated buying an additional 100 shares last week when ETFC was in the mid $10 range just to further reduce my basis.  As you can tell, I decided not to do so at this time.  I will consider adding another 100 shares again in October if my current Calls expire worthless.

S&P currently has a 12-month price target of $12.00, up from $9.00 last December, and now has a Hold rating as of 4/20/12.  Market Edge Second Opinion price opinion is now $9.66, up from a previous $8.91 and now has a Long opinion.  The 12 Yahoo! Analysts currently have a 12-month price target of $10.69, up slightly from an earlier $10.88, and a 2.9 rating where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 12/19/11 I sold 2 ETFC Apr12 $10 Covered Call for a net deposit of $42.48 in an IRA account.  My basis for these ETFC shares is now $84.97.  This transaction represents a simple return of about .25% and an annualized return of about .74% on my prior basis.  Not a great return by any means but it felt better than just outright selling the stock at this time.  Another way to look at this is that this transaction represents a simple return of about 2.83% and an annualized return of about 8.34% on the current value of my ETFC shares.  In other words, I would need to have a return that high or higher before it would make sense to sell ETFC and move the money elsewhere.  The alternative investment analysis is always worth considering before just dumping a stock and moving on…at least in my opinion.

I selected the Apr12 expiration month because it returned a reasonable annualized return at the $10 strike price.  I determined to use the $10 strike based upon the various analyst 12 month price opinions and because it presented a reasonable premium without going much farther out.  I am tending to place a little more value on the Yahoo Analyst’s average recommendation.  I am confident that I can roll these Calls out and up if necessary.

ETFC did a reverse 1:10 stock split in June 2010, which is the reason that my basis is so high per share.  As a result of the split I went from owning 800 shares to 80 shares of ETFC.  I pondered just outright selling the remaining 80 shares for awhile.  However, with all of the apparently good news on ETFC at the time, I decided to purchase an additional 20 shares in July 2010 to bring my holdings in this account to 100 so that I can continue to sell Covered Calls.  The new shares were purchased at a net cost of $15 per share.  I then added 100 shares at 16.20 as the result of a Put assignment last week, which reduced my average basis considerably. So as along as I can sell Covered Calls above the 16 strike price I will probably continue to do so…except that I sold below that this time…again.

S&P currently has a 12 month price target of $9.00, down from $15.00 last October, and continues its Buy rating as of 12/17/11.  Market Edge Second Opinion price opinion is now $8.91, down from a previous $9.11 and now has a Neutral opinion.  The 11 Yahoo! Analysts currently have a 12 month price target of $10.88, down from an earlier $12.53, and a 2.9 rating where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Today, 10/24/11 I sold 2 ETFC Dec11 13 Covered Call for a net deposit of $70.48 in an IRA account.  My basis for these ETFC shares is now 85.18.  This transaction represents a simple return of about .41% and an annualized return of about 1.71% on my prior basis.  Not a great return by any means but it felt better than just outright selling the stock at this time.  Another way to look at this is that this transaction represents a simple return of about 3.32% and an annualized return of about 13.77% on the current value of my ETFC shares.  In other words, I would need to have a return that high or higher before it would make sense to sell ETFC and move the money elsewhere.  The alternative investment analysis is always worth considering before just dumping a stock and moving on…at least in my opinion.

I selected the Dec11 expiration month because it returned a reasonable annualized return at the $13 strike price.  I determined to use the $13 strike based upon the various analyst 12 month price opinions.  I am tending to place a little more value on the Yahoo Analyst’s average recommendation.  I am confident that I can roll these Calls out and up if necessary.

ETFC did a reverse 1:10 stock split in June 2010, which is the reason that my basis is so high per share.  As a result of the split I went from owning 800 shares to 80 shares of ETFC.  I pondered just outright selling the remaining 80 shares for awhile.  However, with all of the apparently good news on ETFC at the time, I decided to purchase an additional 20 shares in July 2010 to bring my holdings in this account to 100 so that I can continue to sell Covered Calls.  The new shares were purchased at a net cost of $15 per share.  I then added 100 shares at 16.20 as the result of a Put assignment last week which reduced my average basis considerably. So as along as I can sell Covered Calls above the 16 strike price I will probably continue to do so…except that I sold below that this time.

Thomson Reuters has a Negative rating on ETFC as of 10/21/11.  S&P currently has a 12 month price target of $15.00, down from $19.00 last May, and continues its Buy rating as of 10/21/11.  Market Edge Second Opinion price opinion is now $9.11, down from a previous $16.30 and now has an Avoid opinion.  The 13 Yahoo! Analysts currently have a 12 month price target of $12.35, down from an earlier $17.64, and a 2.7 rating where 1.0 is a Strong Buy and 5.0 is a Strong Sell.