Today, 1/11/12, I BTC 4 KMX Jan12 $15 Covered Calls and STO 4 KMX Jul12 $15 Covered Calls for a net deposit of $25.83 in an IRA account.  My basis for these KMX shares in now 19.54.  These transactions represent a simple return of about .33% and an annualized return of about .63% on my prior basis.

I really wanted to roll the Jan12 Calls up as well as out but there just was not anything that allowed me to do that and still deposit cash into my account.  The last time I rolled out KMX there were Option LEAPS available which allowed me to roll out for a net deposit of $663.82 in my account.  At this time, LEAPS are not offered leaving me with the Jul12 expiration as the longest time available.  I should probably have let KMX be called away next week and taken the loss, but I did not.

Now, I really do not want to hold on to KMX because it does not pay a dividend, which is my general criterion for stock ownership.  Except for rare occasions, I am only violating that rule for stocks that I already own.  With that, I still rolled KMX out because I am underwater and really did not want to have it called away at $15.  Selling the options allows me to sell the stock piecemeal to recoup some of my investment.  At least that is how I look at it.

Today, 1/6/10, I BTC 4 KMX Jan10 15 Calls and STO 4 KMX Jan12 15 Calls for a net deposit of $663.82 in an IRA account.  My basis for these KMX shares in now 19.60.

I really wanted to roll the Jan10 Calls up as well as out but there just wasn’t anything that allowed me to do that and still deposit cash into my account.  I still had to go all the way out to Jan11 to have a positive cash  transaction.  I looked at the Jan11 and Jan12 15 strike price premiums and decided on the Jan12 because it gave me the better annual return on my basis.  The Jan11 Call offered a 2.08% yield and the Jan12 Call offered a 3.88% yield.

Now, I really don’t want to hold to KMX because it doesn’t pay a dividend which is my general criteria for new stocks.  I am only violating that rule for stocks that I already own and see an opportunity to average down.  With that I still rolled KMX out because I am underwater really did not want to have it called away at 15.  Selling the options allows me to sell the stock piecemeal to recoup some of my investment.  At least that is how I look at it.

On 6/11/09, I BTC 4 Jun09 12.50 Covered Calls and STO 4 Jan10 15 Covered Calls for a net deposit of $106.00 in an IRA account.  My basis for these KMX shares is now 21.26.

I really rolled these KMX Calls out a fair distance, certainly longer than I normally prefer.  I did it this time because I wanted to roll the strike price up and wanted to do it with a net deposit to my account.  KMX has rotated around the 12.50 price since mid March and is still above 12.50 at this writing.  These transactions netted me the additional $106 now and a potential additional $1000 if the stock should be called away before I am ready to let it go.

My goal with KMX at this time is to continue to generate cash flow for the short term with the thought that I will probably set it up to be called away in the long term when I can do so with a profit.