On 8/18/08 I STO 12 GM Sep08 12.50 Covered Calls for a net deposit of $459.00 in two IRA accounts.  My basis for these to sets of 600 GM shares is 13.43 and 19.85.

I am less happy with GM now that they have “suspended” their dividend for the foreseeable future.  I knew that might happen but it still doesn’t feel any better.  So, now GM does not match my investment philosophy or goals.  What do I do?  Since I am underwater on both sets of GM stock my regular readers know that I will probably not sell it, take the loss and move on.  Using the same reasoning as I just did for DYN in my prior post I see that my annualized return on my GM lot with basis at 19.85 is 30.41% and 58.86% on the current market price of 10.44.  As bad as GM appears, that return is nothing to sneeze at.  So, you can see why I continue to hold GM and sell Covered Calls each month even if they are not currently paying dividends.

Here are the results for the options that I still had outstanding when the markets closed on Friday, 8/15/08.  I had four Put assignments and 22 Calls across multiple accounts that expired allowing me to keep all of the option premium.  The 22 Calls are summarized by stock across accounts resulting in 16 stocks being represented in the following list.  I will begin to sell Calls on these stocks starting tomorrow.

Last Friday (7/25/08), I BTC 6 GM Sep08 12.50 Puts and STO 6 GM Dec08 12.50 Puts for a net deposit of $755.00 in my taxable account.

If put to me, my basis for these GM shares would be 9.85.  GM is trading a little of 11.00 right now.  My basis provides me with some additional cushion if GM is put to me at about the current price.  It may be that I will need to roll it out again though if the price continues to fall.

since GM suspended its dividend I am not as happy owning the stock if put to me.  I would look to exit the stock as soon as possible.

And there it is.  This is the last of my trades that I have to document for now.  Thanks for you patience (I am an optimist).