Today I BTC 2 TOL Jan09 30 Puts and STO 2 TOL Jan10 30 Puts for a net deposit of $401.00 in my taxable account.  My basis for these TOL shares would now be 23.88 if put to me today.

With my potential basis at 23.88 and TOL currently trading at 22.98 as I write this I would be in pretty good shape is somebody actually put TOL to me now.  TOL doesn’t pay a dividend but as long as this margin account doesn’t require me to sell the stock right away I would probably hold on to TOL and sell Covered Calls on it to generate additional revenue for the account.  For example, I could sell the TOL Dec08 25 Call for 1.80 right now.  That would net me about another $350 into the account.

On 10/28/08 the E*Trade margin department BTC 2 Dec08 25 Puts and 6 Jan10 12.50 Puts to help satisfy an imbalance in my taxable account.  I am actually glad to get these off my back.  I keep thinking that GM is too big to allow to fail and that the Feds will do something to prevent it, if for no other reason to preserve the millions of jobs that would be lost.  However, in the meantime, I don’t need to own any more GM, especially at those strike prices.

On 10/22/08 I was assigned 2 LXK Jan09 40 Put contracts in my taxable account.  I sold the 200 shares the same day at 25.9801.  This represents a net loss as my basis for LXK was 36.47.  I would like to have sold Covered Calls on LXK but margin calls have just been killing me in this account and I could not afford to hold the stock.  October has really been a bloody month.