On 1/19/10, I sold 4 YHOO Mar10 18 Covered Calls for a net deposit of $78.94 in an IRA account.  My basis for these YHOO shares is now 20.13.

Here I am, late writing about my transactions again.  Life just seems to get in the way.  I have several more transactions that I need to write about.  Maybe I can get them done tonight.

I don’t know that I have much to say about my YHOO shares.  They are not part of my core holding because they are not paying dividends.  On the other hand, making .20 every couple of months is making my own dividend.  At my basis that works out to about 6% annualized – a good dividend but not really at the level I would like to achieve which is 10% or greater.  I’m not there yet for my portfolio partly because of stocks like YHOO in my portfolio.  On the other hand, my return tends to be increasing because my basis continues to decrease.

Yesterday, I sold 4 YHOO Jan10 17.50 Covered Calls for a net deposit of $174.98 in an IRA account.  My basis for these YHOO shares is now 20.33.

My last YHOO options expired in July and I sat on these shares waiting for their price to recover and then I sort of forgot about them in the hustle and bustle of the rest of my life.

I decided on the Jan10 expiration month because I wanted to sell the 17.50 strike which is about where it peaked in July and collect a reasonable premium.  I was able to collect a net .44 per share on these Calls.  I am closing in on being able to sell Covered Calls above my basis which will give me greater flexibility and opportunity to sell Covered Calls with higher premium and closer in.

Today I BTC 4 YHOO Jul09 17 Covered Calls and STO 4 YHOO Aug09 18 Covered Calls for a net deposit of $247.97 in an IRA account.  My basis for these YHOO shares is now 20.77.

I didn’t really want to do these trades but YHOO was moving up nicely after Oppenheimer raised it price target to $19 from $13.25 and maintaining its ”perform” rating on the stock, according to Reuters.  Another news story suggested that MSFT and YHOO are close to a search and online advertising deal which may be made public next week.

I didn’t want to make these trades today because, after watching the price movement for most of the day, I suspected that YHOO would not exceed $17 by market close.  However, I needed to leave my computer an hour before market close and did not want to take the chance that I was wrong.  In the end, I decided that the $28 it cost me for the two trades was well worth the insurance of not losing the stock today.  As it turns out, I made .62 per share on the deal, including  .10 per share buying back the Jul09 Calls.  An investor should always be happy with a profit. 

I should note that YHOO added another .30 in after hours trading, moving up to 17.14.  I have a feeling that I may need to roll out my Aug09 18 Calls before they expire, especially if the MSFT deal turns out to be true.