On 8/20/08, I sold 2 MO OCt08 22 Covered Calls for a net deposit of $46.50 in an IRA account.  My basis for MO is now 37.26.

I sold Oct08 calls rather than Sep08 calls because I don’t want it called away and wanted to get a little better premium than the Sep08 calls offered.

I have owned MO for some time now.  I acquired both KFT and PM from spin offs from MO.  My basis for MO is probably too high because I didn’t do a good job adjusting it when KFT and PM were spun off.  In any case, my intent is to continue to own MO, collect its .29 per quarter dividend and collect option premium every one or two months.

Most of the options I open for Jun08 expired worthless.  Most of them were Covered Calls which allowed me to in turn sell new Covered Calls on them.  In the interest of brevity, here is the list of expires with quantity, strike price and whether it was a Put or Call.  I will make additional posts shortly on specific stocks where I have something more to say about them.

Together, these expirations represent $3183.50 in prior deposits in my various accounts.

• 5 JOYG - 80 Put
• 2 PGH - 20 Put
•  7 AUY - 15 Call
• 2 BAC - 35 Call
• 3 CKR - 15 Call
• 51 FBR - 5 Call
• 1 FBR - 2.50 Call
• 2 GOL - 17.50 Call
• 2 IMB - 2.50 Call
• 2 IR - 52.50 Call
• 2 KFT - 35 Call
• 2 LEH - 30 Call
• 2 PM - 55 Call
• 3 S - 10 Call
• 4 TBI - 15 Call
• 4 YHOO - 30 Call

I rolled out my MO Dec 75 Calls to March and rolled out and up my KFT Dec 32.50 Calls to Jun 35 Calls.  Both these were in one of my IRA accounts.

These 2 transactions did not net me very much ($282.01 together) but I own the MO for about $85 so did not want them called away yet plus it pays just a little over 4% in dividends.  I would have liked to roll the MO up but would have needed to go out to Jan 09 and did not want to go that far out.  I would normally have waited until closer to expiration but was afraid that somebody would call the MO away to capture the dividends.  That has happened to me before.

I rolled the KFT out and up to hopefully capture some additional money at the slightly higher strike price.  I will probably let it go if it gets called at the $35 strike price.