December 7th, 2009 at 3:10 pm
On 12/2/09, I bought 100 shares of S at a net of 3.85 and sold 4 S May10 5 Covered Calls for a net deposit on the Calls of $114.98 in an IRA account. My average basis for the S shares is now 16.59.
I bought the 100 shares to average down my basis for Sprint. Being able to sell Covered Calls above the price of the new shares helped me decide to make this trade. If Sprint is still down in May I will probably buy additional shares to help further reduce my basis. Eventually, I expect to get out of Sprint at a profit above my basis.
July 31st, 2009 at 12:29 pm
Today I sold 3 S Nov09 6 Covered Calls for a net deposit of $17.73 in an IRA account. My basis for these S shares is now 21.22, excluding dividends received.
What do I say about Sprint? I just continue to hold them for the paltry options premium I occasionally receive. I suspect that one day, something big will happen and they will be called away below my basis when I am not paying too much attention to it. I should probably sell it and try to find a better use for the money but having sold these Covered Calls I defer that idea to another day.
June 4th, 2009 at 11:26 am
On 5/28/09, I sold 3 S Jul09 6 Covered Calls for a net deposit of $43.75 in an IRA account. My basis for these S shares is now 21.28, excluding dividends received.
As you can see, I am underwater on these S shares. I am making steady, although slow, progress toward reducing my basis. I am also able to begin to raise my strike price and sell closer in options again. S actually began its recent climb from under $2 in late Dec08 and appears likely to continue that trend for the foreseeable future. Of course, it needs to get back to its level of about two years ago before I can let it go at a profit.
