Continuing Transaction - McGraw-Hill (MHP) (9/18/2009)

McGraw-Hill was another position which was rolled out to another month's expiration. The stock has been on quite a rollercoaster ride since I purchased it. It rose as high as $33, and was promptly demolished after a pending court case was not dismissed regarding its ratings business. As the stock had made a brief rebound, I decided to roll-out the call until November. The new profit/loss info is below:

8/21/2009 -- Bought 100 MHP @ 29.66
8/21/2009 -- Sold To Open 1 MHP September $30 Call @ 0.86
8/24/2009 -- Dividend @ 0.23
9/3/2009 -- Bought To Open 1 MHP September $25 Put @ 0.20
9/18/2009 - Bought To Close 1 MHP September $30 Call @ 0.08
9/18/2009 -- Sold To Open 1 MHP November $30 Call @ 1.12

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Cost Basis: 2890.00

Potential Gain If Called At Expiration: 7.51%
PotentialAnnualized Gain If Called At Expiration: 29.79%

Continuing Transaction - AT&T (T) (9/17/2009)

Continuing the trend of rolling positions over to October expirations, I did so on AT&T as it was going to be paying a dividend in October. The new profit/loss info is below:

Transaction History:
Various -- Bought 100 T @ 25.125
2/25/2009 -- Sold To Open 1 T March $24 Call @ 0.895
3/6/2009 -- Bought To Close 1 T March $24 Call @ 0.3874
4/7/2009 -- Dividend @ 0.41
4/16/2009 -- Sold To Open 1 T May $26 Call @ 0.8126
5/15/2009 -- Call Expired
7/8/2009 -- Dividend @ 0.41
7/23/2009 -- Sold To Open 1 T August $26 Call @ 0.4
8/21/2009 -- Call Expired OTM
8/24/2009 -- Sold To Open 1 T September $26 Call @ 0.53
9/17/2009 -- Bought To Close 1 T September $26 Call @ 0.34
9/17/2009 -- Sold To Open 1 T October $26 Call @ 0.64


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2512.50
Current Cost Average: $21.75


Downside Coverage (based on current share price, 26.30): 17.3%

Possible Max Upside (if called at ex-div): 17.52%
Annualized Max Upside (if called at ex-div): 28.42%

Possible Max Upside (if called at expiration): 19.21%
Annualized Max Upside (if called a expiration): 29.97%

Continuing Transaction - The Buckle (BKE) (9/17/2009)

As expiration day was coming to a close I decided to roll forward my position in The Buckle, a premium denim retailer. The stock has made quite the rebound since falling to $26 after a lackluster same-store sales report in July. With the stock approaching $30, I decided to roll forward the September $30 call to October in case of a precipitous decline in the market during the following week while I would be away. Additionally, The Buckle normally pays a dividend in October, and so holding onto the stock for another month would yield additional profit. The new profit/loss info is below:

8/7/2009 -- Bought 100 BKE @ 26.70
8/7/2009 -- Sold To Open 1 BKE $30 September Call @ 0.70
9/17/2009 -- Bought To Close 1 BKE $30 September Call @ 0.15
9/17/2009 -- Sold To Open 1 BKE $30 October Call @ 0.85

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2635.00

Downside Coverage (Current Price of 29.23): 13.95%
Possible Max Upside: 16.32%

Annualized Max Upside: 83.89%

Continuing Transaction - SPY (9/16/2009)

Continuing with my new strategy which was described in my previous post on the SPY call. I decided to roll it over to an October call. For this call to become appreciating the SPY would have to rise 3% from its current levels (from 107 -> 110). The purchase info is below:

8/24/2009 -- Bought 1 $106 SPY September Call @ 1.35
9/16/2009 -- Sold 1 $106 SPY September Call @ 0.58
9/16/2009 -- Bought 1 $110 SPY October Call @ 0.82

Continuing Transaction - Best Buy (BBY) (9/15/2009)

It would seem that I always have to be traveling the week before or the week after expiration. This has thus far presented a difficult decision on how to deal with positions that are in-the-money when nearing expiration as the decision has to be made to roll them up and out, or close the position early in order to open a new one. For Best Buy, the decision was made after earnings were announced causing the stock price to drop about 7% from a high of 41 pre-earnings announcement to around 39. With an upcoming dividend, relatively good option premiums, and my continued belief in future earnings potential, I decided to roll the position out at the same strike for the next month, while also purchasing a protective put to guard against a continued drop in the stock as well as a general drop in the market. The new profit/loss info is below:

6/12/2009 -- Bought 100 BBY @ 37.54
6/12/2009 -- Sold To Open 1 BBY July $39 Call @ 1.54
6/12/2009 -- Bought To Open 1 BBY June $35 Put @ 0.6
6/18/2009 -- Bought To Close 1 BBY July $39 Call @ 0.50
6/18/2009 -- Sold To Close 1 BBY June $35 Put @ 1.1
6/23/2009 -- Sold To Open 1 BBY July $38 Call @ 0.20
7/2/2009 -- Dividend @ 0.14
7/18/2009 -- Call Expired
7/20/2009 -- Sold To Open 1 BBY August $38 Call @ 0.65
8/12/2009 -- Bought To Close 1 BBY August $38 Call @ 0.6
8/12/2009 -- Sold To Open 1 BBY September $39 Call @ 1.20
9/15/2009 -- Bought To Close 1 BBY September $39 Call @ 1.52
9/15/2009 -- Sold To Open 1 BBY October $39 Call @ 2.39
9/15/2009 -- Bought To Open 1 BBY October $32 Put @ 0.35

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $3660.00

Possible Max Upside: 14.19%

Annualized Max Upside: 40.8%

Continuing Transaction - Best Buy (BBY) (8/12/2009)

As I was going to be going on vacation out of the country the following week, I decided to roll this call forward to September, as well as raising the strike price. The new profit/loss info is below:

6/12/2009 -- Bought 100 BBY @ 37.54
6/12/2009 -- Sold To Open 1 BBY July $39 Call @ 1.54
6/12/2009 -- Bought To Open 1 BBY June $35 Put @ 0.6
6/18/2009 -- Bought To Close 1 BBY July $39 Call @ 0.50
6/18/2009 -- Sold To Close 1 BBY June $35 Put @ 1.1
6/23/2009 -- Sold To Open 1 BBY July $38 Call @ 0.20
7/2/2009 -- Dividend @ 0.14
7/18/2009 -- Call Expired
7/20/2009 -- Sold To Open 1 BBY August $38 Call @ 0.65
8/12/2009 -- Bought To Close 1 BBY August $38 Call @ 0.6
8/12/2009 -- Sold To Open 1 BBY September $39 Call @ 1.20

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $3660.00

Downside Coverage: 5.57%
Possible Max Upside: 12.75%

Annualized Max Upside: 47.01%

Continuing Transaction - Mack-Cali Realty (CLI) (6-22-2009)

In order to again attempt to relinquish some of my position in Mack-Cali realty, I am selling a July $22.50 call. Hopefully this results in these 100 shares being called away, but as I have said many times before this stock is still a quality one, so if I am still left with these shares at expiration all would not be lost. The only question mark which exists is if the shares will be called away before July 1st, which is the ex-dividend date. I plan to leave at least half of my position in Mack-Cali uncovered until after the ex-div date to reap at least some of the benefit. The profit/loss info is below:

Various -- Bought 100 Shares of CLI @ 21.18
3/2/2009 -- Sold To Open 1 July $22.50 Call @ 1.2225
3/10/2009 -- Bought To Close 1 July $22.50 Call @ 1
4/1/2009 -- Dividend @ 0.45
4/3/2009 -- Sold To Open 1 May $22.50 Call @ 2.50
5/15/2009 -- May $22.50 Expired
5/18/2009 -- Sold To Open 1 June $25 Call @ 0.95
6/19/2009 -- June $25 Call Expired
6/22/2009 -- Sold To Open 1 July $22.50 Call @ 0.75

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2118.00


Downside Coverage (based on current price, 21.50): 24.37%
Possible Max Upside: 31.27%

Annualized Max Upside: 82.70%

Continuing Transaction - Omnicare (OCR)

As discussed in my previous post regarding this position, I went ahead and sold a June $25 call on OCR in an effort to close the position. If the position closes out of the money on expiration day I wont be too disappointed as it will have further lowered my basis, and I dont think the stock would fall much further (knock on wood). The purchase info is below.

4/27/2009 -- Bought 100 OCR @ 26.465
4/27/2009 -- Sold To Open 1 OCR May $27.50 Call @ 1.25
5/15/2009 -- Call Option Expired
5/19/2009 -- Sold To Open 1 OCR June $27.5 Call @ 0.95
6/6/2009 -- Bought To Close 1 OCR June $27.5 Call @ 0.15
6/9/2009 -- Sold To Open 1 OCR June $25 Call @ 0.45


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2646.50

If stock is called at expiration:

Downside Coverage (based on current share price): 1.8%
Possible Max Upside: 5.2%

Annualized Max Upside: 35.13%

Continuing Transaction - Omnicare (OCR)

After a large drop in the share price of Omnicare, I chose to buy back the June $27.5 call. I am currently reviewing Omnicare as part of my portfolio, and may sell a $25 June call in order to increase my likelihood of exiting the position. The increasing discussion of a nationalized health care plan is beginning to impact healthcare stocks in my opinion. The purchase info is below.

4/27/2009 -- Bought 100 OCR @ 26.465
4/27/2009 -- Sold To Open 1 OCR May $27.50 Call @ 1.25
5/15/2009 -- Call Option Expired
5/19/2009 -- Sold To Open 1 OCR June $27.5 Call @ 0.95
6/6/2009 -- Bought To Close 1 OCR June $27.5 Call @ 0.15


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2646.50

If stock is called at expiration:

Downside Coverage (based on current share price): 1.6%
Possible Max Upside: N/A

Annualized Max Upside: N/A

Continuing Transaction - AT&T (T)

After an extreme pullback in AT&T's stock over the past week, I decided to leave 100 shares of my position uncovered, and wait for a move higher, while establishing a further out call in order to capture premium, while still allowing for an upside movement. The new metrics for the 100 shares which are now covered is below:

Transaction History:
2/21/2009 -- Additional Stock Purchased -- Bought T @ 23
2/27/2009 -- Sold To Open 1 T April $20 Call @ 3.95
3/10/2009 -- Bought To Close 1 T April $20 Call @ 2.93
3/10/2009 -- Sold to Open 1 T April $25 Call @ .34
3/13/2009 -- Bought To Close 1 T April $25 Call @ .84
3/13/2009 -- Sold To Open 1 T April $26 Call @ .39
4/7/2009 -- AT&T Dividend @ .41
4/17/2009 -- Covered Call Expire
4/20/2009 -- Sold To Open 1 T May $27 @ .43
5/15/2009 -- Covered Call Expire
5/20/2009 -- Sold To Open 1 T Oct $27 @ .65

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $4,812.50


Downside Coverage (based on current share price): 9%
Possible Max Upside: 28.71% (not including July and Oct dividend which would make this 33%)

Annualized Max Upside: 44.04% (not including July and Oct dividend which would make this 50%)

Continuing Transaction - Omnicare (OCR)

As was discussed in my post after May expiration, I chose to continue the position in Omnicare, a pharmaceutical supply company, similar to a Walgreens. The premiums continue to remain relatively high for a company which is not very speculative, they continue to have high operating margins relative to their peers. The purchase info is below.

4/27/2009 -- Bought 100 OCR @ 26.465
4/27/2009 -- Sold To Open 1 OCR May $27.50 Call @ 1.25
5/15/2009 -- Call Option Expired
5/19/2009 -- Sold To Open 1 OCR June $27.5 Call @ 0.95


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2646.50

If stock is called at expiration:

Downside Coverage (based on current share price): 9.4%
Possible Max Upside: 13.62%

Annualized Max Upside: 92.08%

Continuation Transactions After May Expiration

After last Friday's expiration for May 2009, there were 11 positions which were retained and had options which had expired in May. Today it was decided to retain all of these positions based on continued option premium to be gathered, and a strong showing by the market today, which allowed for multiple in-the-money positions to be created which will still yield very high potential returns. There were only 2 positions which remain uncovered, AT&T (T) which was one of the few market movers to decline today, though all utilities had a poor showing today, and Omnicare (OCR), which I chose to set a limit order on the call which was not reached. The transactions to date and performance metrics for each of the positions is listed below.

1. Direxion 3x Financial Bull -- Continuation Transaction

As was explained in the post regarding May expirations, all positions in FAS will be kept through June expiration. The only notable difference, is that due to a drastic increase in the share price today, a $9, $10, and $11 call were sold instead of 1 $9 strike, and 2 $10 strikes. The new profit/loss projections are below:

4/9/2009 -- Bought 100 FAS @ 7.835
4/9/2009 -- Sold To Open 1 FAS May $8 Call @ 1.45

4/21/2009 – Bought To Close 1 FAS May $8 Call @ 0.85

4/21/2009 – Sold To Open 1 FAS May $9 Call @ 0.7

5/15/2009 – May $9 Call Expired

5/18/2009 – Sold To Open 1 FAS June $9 Call @ 1.5


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $783.50


Downside Coverage From Current Price: 51.2%
Possible Max Upside: 62.1%

Annualized Max Upside: 314.81%

2. Direxion 3x Financial Bull -- Continuation Transaction

The new profit/loss projections are below:

4/14/2009 -- Bought 100 FAS @ 9.245
4/14/2009 -- Sold To Open 1 FAS May $9 Call @ 0.9

4/15/2009 – Bought To Close 1 FAS May $9 Call @ 0.25

4/15/2009 – Sold To Open 1 FAS May $10 Call @ 0.95

5/15/2009 – May $10 Call Expired

5/18/2009 – Sold To Open 1 FAS June $10 Call @ 1.05


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $924.50


Downside Coverage From Current Price: 36%
Possible Max Upside: 40.8%

Annualized Max Upside: 222.28%

3. Direxion 3x Financial Bull -- Continuation Transaction

The new profit/loss projections are below:

4/17/2009 -- Bought 100 FAS @ 9.745
4/17/2009 -- Sold To Open 1 FAS May $8 Call @ 2.65

5/7/2009 – Bought To Close 1 FAS May $8 Call @ 3.55

5/7/2009 – Sold To Open 1 FAS May $10 Call @ 1.95

5/15/2009 – May $9 Call Expired

5/18/2009 – Sold To Open 1 FAS June $11 Call @ 0.95


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $974.50


Downside Coverage From Current Price: 26%
Possible Max Upside: 45.9%

Annualized Max Upside: 261.64%

4. Continental Airlines -- Continuation Transaction

Although Continental Airlines did eventually rebound above $11, it was my decision based on the other available covered call positions in my pipeline, that it would make the most sense to continue this position. The new profit/loss projections are below:

4/14/2009 -- Bought 100 CAL @ 12.225
4/17/2009 -- Sold To Open 1 CAL May $11 Call @ 2.17

5/15/2009 – May $11 Call Expired

5/18/2009 – Sold To Open 1 CAL June $11 Call @ 1.05

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $1222.50


Downside Coverage From Current Price: 19%
Possible Max Upside: 19.84%

Annualized Max Upside: 108.09%

5. Mack-Cali Realty -- Continuation Transaction

As mentioned in the post for May expirations, the rather large position in CLI was not intended to remain after Friday. However, due to the large decrease in the stock price last week, all positions ended out of the money. In order to again attempt to reduce the position in CLI, but still capture value, additional calls have been sold with an emphasis on in-the-money calls. The new profit/loss projections are below:

Various -- Bought 100 CLI @ 20.91
3/2/2009 -- Sold To Open 1 CLI July $22.5 Call @ 1.2225

3/10/2009 – Bought To Close 1 CLI July $22.5 Call @ 1

4/1/2009 – CLI Dividend @ .45

4/3/2009 – Sold To Open 1 CLI May $22.5 Call @ 2.5

5/15/2009 – May $22.5 Call Expired

5/18/2009 – Sold To Open 1 CLI June $25 Call @ 0.95

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2091.00


Downside Coverage From Current Price: 29%
Possible Max Upside: 40.58%

Annualized Max Upside: N/A

6. Mack-Cali Realty -- Continuation Transaction

The new profit/loss projections are below:

Various -- Bought 100 CLI @ 20.91
3/2/2009 -- Sold To Open 1 CLI July $22.5 Call @ 1.2225

4/1/2009 – CLI Dividend @ .45

3/10/2009 – Bought To Close 1 CLI July $22.5 Call @ 4.45

4/3/2009 – Sold To Open 1 CLI May $25 Call @ 1.7

5/15/2009 – May $25 Call Expired

5/18/2009 – Sold To Open 1 CLI June $22.50 Call @ 2.75

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2091.00


Downside Coverage From Current Price: 20%
Possible Max Upside: 16.57%

Annualized Max Upside: N/A

7. Mack-Cali Realty -- Continuation Transaction

The new profit/loss projections are below:

Various -- Bought 100 CLI @ 22.90
2/23/2009 -- Sold To Open 1 CLI July $25 Call @ 0.4592

3/6/2009 – Bought To Close 1 CLI July $25 Call @ 0.1408

4/1/2009 – CLI Dividend @ .45

4/3/2009 – Sold To Open 1 CLI May $22.50 Call @ 2.8925

5/15/2009 – May $25 Call Expired

5/18/2009 – Sold To Open 1 CLI June $22.50 Call @ 1.8925

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2290.00


Downside Coverage From Current Price: 26%
Possible Max Upside: 20.96%

Annualized Max Upside: N/A

8. Chesapeake Energy -- Continuation Transaction

After contemplating selling this position over the weekend I decided that I would overlook recent issues with executive compensation and a miss in the latest earnings report. This stock is mainly focused on natural gas, which has seen a drastic decrease in price since the commodity bust. Unlike crude oil, natural gas has not recovered in the recent stock market rally. Based on some work that I performed in a consulting project recently, it is my opinion that natural gas is quite undervalued currently in comparison to crude on an energy basis. As such, I believe that there is quite a lot of upside here. Additionally, the stock took the earnings news pretty well in stride, which makes me think there is some underlying strength here. As such a new covered call position was established this afternoon. The new profit/loss projections are below:

4/14/2009 -- Bought 100 CHK @ 21.095
4/14/2009 -- Sold To Open 1 CHK May $21 Call @ 1.86

5/6/2009 – Bought To Open 1 CHK May $19 Put @ 0.35

5/15/2009 – May $21 Call and $19 Put Expired

5/18/2009 – Sold To Open 1 CHK June $21 Call @ 1.25

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2109.50


Downside Coverage From Current Price: 13%
Possible Max Upside: 13.85%

Annualized Max Upside: 75.48%

Continuing Transaction - Mack-Cali Realty (CLI) - Position #1

One of the positions in Mack-Cali was continued after buying back a July call in March. The new profit/loss projections are below:

Various -- Bought CLI CLI @ 22.90
2/23/2009 -- Sold To Open 1 CLI July $25 Call @ .4592
3/6/2009 -- Bought to Close 1 CLI July $25 Call @ .1408
4/1/2009 -- Dividend @ .45
4/9/2009 -- Sold to Open 1 CLI July $25 Call @ 2.1426


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2290.00


Downside Coverage: 10.9%
Possible Max Upside: 20.3%