Today, 1/30/12, I sold 10 WFC Feb12 $31 Calls for a net deposit of $60.41 in 5 IRA Accounts and in my Taxable Account.  My new basis for these FCX varies from $30.36 to $30.71.  These transactions represents simple returns of about .10% to about .27% and annualized returns of about 2.11% to about 5.49% on my potential basis with 18 days to expiration.  I will also collect a .12 dividend on these shares as WFC goes ex-dividend in a couple of days on 2/1/12.

I acquired these shares by design by selling last weeks “weekly” Puts at the $31 strike.  However, WFC fell more than I anticipated last week making the Feb 3, 2012 weekly WFC $31 calls too cheap to generate a positive cash flow.  Even the Feb12 $31 Calls just barely created profits for my single lots.  Even so, I sold the Feb12 $31 Calls because my goal with these shares is to be back to cash as quickly as possible with a profit.  I rather expect that the Feb12 Calls will expire worthless and I will then be able to sell new calls, hopefully the weeklies.

S&P continues a 12-month price target of $33 with a Buy recommendation.  MarketEdge continues a price opinion of $26.07 and has a Long recommendation.  The 30 Yahoo Analysts have a 12-month price target of $34.28 and a recommendation of 2.1 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

Yesterday, 1/23/12, I sold 10 WFC Jan 27, 2012 $31 Puts for a net deposit of $554.41 in 5 IRA Accounts and in my Taxable Account.  My basis for these FCX varies from $30.39 to $30.54.  These transactions represents simple returns of about 1.51% to about 2.01% and annualized returns of about 138.08% to about 183.19% on my potential basis with 4 days to expiration.

FCX rose above my comfort range for selling weekly options.  At this time, I prefer FCX to be no higher than $40 and a few cents for the weekly trades.  So, casting about for another stock for weekly trading, I settled on WFC as the one with which I am most comfortable.  WFC has the added benefit of being lower priced which allows me to trade more contracts.  I considered buying the stock and selling Covered Calls at $31 until I saw that I could sell the $31 Puts and acquire the shares at a lower price if they are assigned to me while earning a larger dollar premium.  At this time, I fully expect that these shares will be assigned to me and that I will be selling Covered Calls at $31 on the shares next week.

S&P has a 12-month price target of $33 with a Buy recommendation.  MarketEdge currently has a price opinion of $26.07 and has a Long recommendation.  The 30 Yahoo Analysts have a 12-month price target of $34.08 and a recommendation of 2.1 on a scale where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

As I said earlier I was out of town and pretty much out of touch for a few days.  During that time E*Trade issued me a margin call and then swooped in on 10/13/08 and did some trading for me.  I had previously spoken to my E*Trade representative and given him my cell phone number but of course he lost it and could not contact me.  So, with that background, here is what happened.

BTC 5 AUY Jan09 15 Puts at a cost of $4961.74 which represents a net cost of 2323.53.

BTC 2 WFC Oct08 30 Covered Calls at a cost of $279.49 which represents a net profit of 31.01.

BTC 4 AA Apr09 40 Puts at a cost of $10850.99 which represents a net cost of 6962.01.

BTC 4 MSFT Jan10 35 Covered Calls at a cost of $330.99 which represents a net profit of 814.00.

BTC 2 DSX Dec08 40 Puts at a cost of $5195.49 which represents a net cost of 2525.00.

Sold 200 WFC for $5789.97 which represents a profit of 679.97.

Sold 400 MSFT for $9803.95 which represents a lost of 784.05.

When all is said and done I didn’t feel too bad this time about their actions to satisfy my margin call when I could not be reached.