Today, 1/10/11, I BTC 2 NVDA Jan11 16 Covered Calls and STO 2 Jan12 NVDA Covered Calls for a net deposit of $160.94 in an IRA account.  My basis for these NVDA shares is now 26.06.  This transaction represents a simple return of about 2.37% and an annualized return of about 2.24% on my prior basis.  In addition to the current cash flow, this transaction also raises my strike price by $1.50.  Including the increased strike my potential returns if called are now a simple return of about 7.99% and an annualized return of about 7.53%.  Of course, I would still be losing money on the entire chain of trades.

NVDA is rising faster and farther than I expected.  Apparently it is rising farther that the analysts expect also.

S&P continues to have a 12 month target of $13 for NVDA.  MarketEdge has a price opinion of only $10.55 but it was formed way back in September 2010.  NVDA has had a 52 week high of 18.96 and a low of 8.65.  Yahoo! Finance analysts only have a $14.42 12 month price target with a range of $9 to $24.  It is trading at $20.45 as I write this.  It had a lot of resistance near 18 during the Feb through May 2010 months but had drifted lower since then, except for lately when it has been moving up quite sharply since the first of the year.

One day I will let NVDA be called away from me and be done with it.  It does not pay a dividend and I do not get sufficient option premiums from it to like it for that reason.  For now I continue to hold the stock and sell Covered Calls and am currently a little optimistic that I may actually be able to sell NVDA at a profit one day.  Six months ago I was of the opinion that it was dead money and that I should let it be called away sooner at a lower strike price and redeploy the money in a better returning investment.

Today, 12/21/10, I STO 2 NVDA Jan11 16 Covered Calls for a net deposit of $30.47 in an IRA account.  My basis for these NVDA shares is now 26.72.  This transaction represents a simple return of about .60% and an annualized return of about 7.03% on my prior basis.

S&P currently has a 12 month target of $13 for NVDA.  NVDA has had a 52 week high of 18.96 and a low of 8.65.  It is trading at 14.87 as I write this.  It had a lot of resistance near 18 during the Feb through May months but has drifted lower since then.  On Yahoo! Finance I see that there is at least one analyst that has a $20 price target on NVDA and at least one with a target of $9.  The averages are around $14.

My last Calls on NVDA were the Dec10 16 that just expired.  I wrote the Jan11 Covered Calls because I am tending to believe that NVDA will be moving higher as its R&D begins to pay off by increase usage of its various chips.  The shorter holding period might allow me to begin selling Covered Calls at higher strike prices each month or roll out and up if necessary.

One day I will let NVDA be called away from me and be done with it.  It does not pay a dividend and I do not get sufficient option premiums from it to like it for that reason.  For now I continue to hold the stock and sell Covered Calls and am currently a little optimistic that I may actually be able to sell NVDA at a profit one day.  Six months ago I was of the opinion that it was dead money and that I should let it be called away sooner at a lower strike price and redeploy the money in a better returning investment.

Yesterday, 6/21/10, I STO 2 NVDA Dec10 16 Covered Calls for a net deposit of $60.46 in an IRA account.  My basis for these NVDA shares is now 26.87.

S&P has a 12 month target of $17 for NVDA.  NVDA has had a 52 week high of 18.96 and a low of 9.71.  It is trading at 11.89 as I write this.  It had a lot of resistance near 18 during the Feb through May months but has drifted lower since then.

My last Calls on NVDA were the Jun10 15 that just expired.  As in this case, I tend to write Covered Calls about 6 months out for NVDA in order to get a reasonable premium deposit.  I see I wrote the current one at a strike price one dollar higher than my last contract.  I was influenced by the S&P 12 month price target to go a little higher at the cost of a lower premium.

One day I will let NVDA be called away from me and be done with it.  It does not pay a dividend and I do not get sufficient option premiums from it to like it for that reason.  I continue to hold on the stock and sell Covered Calls at the same time I am becoming more of a believer that I really should see this as dead money and let it be called away sooner at a lower strike price and redeploy the money in a better returning investment.  I have several stocks that fit that same description.  This may be the year that I finally start taking that action.  We’ll see.