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

Update Transaction - Hewlett Packard (HPQ)

The cash-secured put position in Hewlett-Packard was closed out today after a large increase in the stock above $37. I thought it best to take profits here, and hope for a bit of a pullback to around the $36 level, where I would sell the $35 put again either for June or July. I still believe HP to be a good long term investment. The performance metrics are below:

5/27/2009 -- Sold To Open 1 HPQ June $35 Put @ 1.20
6/6/2009 -- Bought To Close 1 HPQ June $35 Put @ 0.30

Put Sale Profit: $90.00

Closing Transaction - MEMC Electronic Materials (WFR)

Today I decided to close my position in WFR after making essentially all the money that I could in the position. I think that there is likely still a lot of potential for this stock, and I may re-enter if it goes back down to the $14-18 range that I have purchased it in the previous two times. I think it is always important to keep track of stocks which you have held positions in before, because you may want to get back in if the fundamentals change, or the price drops for no reason, as I believed it did when I got back into this stock this month. The profit info is below:

5/18/2009 -- Bought 100 WFR @ 16.65
5/18/2009 -- Sold To Open 1 WFR June $17.5 Call @ 0.91

6/6/2009 -- Bought To Close 1 WFR June $17.5 Call @ 3.05

6/6/2009 -- Sold 100 WFR @ 20.27


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $1574.00

Realized Upside: 9.4%

Annualized Max Upside: 180.63%

Covered Call Investing Strategies

After reading multiple blogs regarding covered call investing, I have decided to write a series of posts regarding the various blog-based covered call strategies that are out there, to provide readers with a sort of playbook that they could choose to use.  I am currently collecting strategies from the various blogs on covered calls that I have found, and will be compiling an overall picture to describe over the next few weeks.  Thus far, the blogs which I will be using for this summary (all blog owners have given approval, dont worry :) are:

coveredcallsadvisor.blogspot.com

stockrent.blogspot.com

coveredwriter.blogspot.com

buywrite.wordpress.com

troysmoneytree.wordpress.com

I hope those of you that read my post, also begin to keep track of these other blogs as well, and please let me know if there are any other blogs that you can recommend to me to include in my "study."  Also, please let me know if there are specific topics that you would like to see called out and discussed.

Jake

Closing Transaction - Tivo (TIVO)

Sometimes it is smarter to be lucky, than lucky to be smart.  This was definitely the case with TIVO.  Last night, an appeals court ruled in their favor on a patent infringement case against Echostar, and was awarded over $100 million in damages.   This amount comes to about half of annual revenues for Tivo providing a needed boost in times of decreased demand.  This however is a short term boost, and has no real impact on the company's future profits.  As such, I decided to exit the position and reap over a 300% annualized gain.  The purchase info is below:

4/19/2009 -- Bought 100 TIVO @ 7.48
4/19/2009 -- Sold To Open 1 TIVO June $7.50 Call @ .63
5/28/2009 -- Bought To Close 1 TIVO June $7.50 Call @ .25
5/28/2009 -- Sold To Open 1 TIVO Nov $10 Call @ .35
5/28/2009 -- Bought To Open 1 TIVO June $5 Put @ .2

6/3/2009 -- Bought To Close 1 TIVO Nov $10 CAll @ 1.85

6/3/2009 -- Sold 100 TIVO @ 9.70


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $748.00

Realized Upside: 12.95%

Annualized Max Upside: 315.11%

Update Transaction - AT&T (T)

Unfortunately, AT&T continues to lag the overall market.  As such I have decided that I would like to exit the position if it all possible, but not leave any money on the table either.  In order to maximize profits, I bought back my October call, and sold a June $25 call simply for the purpose of exiting the position.  If AT&T is under $25 at June expiration, then I have managed to further lower my basis, and if it is above, then I can establish a new position in something else.  Changing to a very close strike should however greatly increase the probability of the call being exercised.  The other 100 shares in AT&T will remain uncovered.  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

6/1/2009 -- Bought To Close 1 T Oct $27 @ 0.79

6/1/2009 -- Sold To Open 1 T June $25 @ 0.4

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: 14.05% 

Annualized Max Upside: 43.46%

Update Transaction - General Electric (GE)

One of the CSP positions in the CCIP was closed today after only being held for two days. Although it was a relatively miniscule amount on an absolute basis, I'm trying to start slow in terms of CSP's.  The market's jump today made it worthwhile to close out the position, and establish a new one for next month. If the GE price drops to around 13.15 I may sell another $12 July CSP.  The performance metrics are below:

5/27/2009 -- Sold To Open 1 GE June $12 Put @ 0.32

6/1/2009 -- Bought To Close 1 GE June $12 Put @ 0.11

6/1/2009 -- Sold To Open 1 GE July $12 Put @ 0.4

The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Put Sale Profit: $61.00


Downward Movement Required (Put Sold When GE@13.70): 12.4%
Possible Max Upside: 5.08%

Annualized Max Upside: 39.48%