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Thanks Gtober. Nice link. The aggressive ones get me in trouble. I will probably look further down the list. I can't imagine writing calls on ABK right now. lol!
Joe, you might find some ideas here. I have tried a few of their recs for quick trades, but they are generally very volatile and aggressive stocks at the top of the lists.
http://www.freeoptioninfo.com/
My new covered call only port is now up and able to trade options. I started this port with $25,000. My goal is to average a 3% return every month after the Mar expiration at which time I should have a full stable of stocks. I will post my trades here in real time or near to it in a fast market.
My first trade is ADS.
Long 100 shares at 51.74. Sold the MAR 50 for $5.90. Downside protection to 45.84. 8% return if taken out at 50.
SEED - out at 6.88 for 2.33 loss. bought back the calls for .10 for a .55 gain. Net loss 1.78.
Lousy report last night. Not one of my better trades. Fortunately it was small.
PGJ - Added some here at 29.02. Sold the April 29's @ 1.70. Nice to have strikes at every dollar. ETF gives me some diversification. Nice premiums. Don't mind owning this one lower at all. Not well know. Open interest is very thin.
About ETF PGJ...
The investment seeks results that correspond generally to the price and yield (before the Fund's fees and expenses) of an equity index called the Halter USX China index(SM). The fund normally invests at least 80% of total assets in equity securities of companies deriving a majority of their revenues from the People's Republic of China. It may invest at least 90% of total assets in equity securities that comprise the China Index. The fund seeks to match the performance of the China Index. It is nondiversified.
Good Morning, very nice board! Delighted to have had it pointed out to me.
I routinely write close-in slightly OTM covered calls against stocks in my trading account. I also write some against IRA stocks, but those are further out and at strike prices where I would be comfortable selling.
One stock I would offer for a look-see is ELN. There are often excellent premiums in both short term and longer term calls and the stock itself should do very well over time. Currently trading at ~$25, stikes for $27 have just been added for Apr. and July.
GLTA,
Cat
Yes CHOAD, it makes it difficult to pay dividends when there are no profits!
Jim
>>>>>the company is not profitable<<<<<
Now there's an understatement Jim! LOL DNDN
Thank you, Joe. Far from retiring at 46. Will play with a little more then. Made my first move on FRPT yesterday.
Gtober, Great post. I need to study that strategy more. I have heard you talk about it before, but it is clearer now.
Thanks.
rros, I true covered call only port would be less risky than a stocks only port if managed properly. The port risk factor would be relative to the quality of the holdings. If you were going to load the port up with equities anyways, I would say selling calls on all the stocks should give you a better return than not selling the calls.
That said, I am not recommending that your funds for investment should all be in stocks. What I am saying is that the part in stocks could be 100% buy-writes and I would think it would have less risk and potentially more gains.
This week I am setting up a $25,000 cash port with margin, and only going to do covered calls. I plan to always be fully invested. I will report my trades here. At the end of each month I will update the balance. I am curious how it will do. I currently have portfolio with the majority in covered call plays, but never did one solely. The account has been funded, just waiting for option approval.
I would suggest the same with you. Split out a amount you want to put towards covered calls and call it your 'covered call port'. See how well you do starting off slowly and as you gain experience and confidence, add funds to the port if it is doing well. Just remember, covered calls will not totally insulate you from market downturns. That's why I like to spice my port up with some insurance with holdings in TWM and DUG to hedge. DUG only because the majority of my covered calls are in the energy area.
I think 10-15% of your port in stocks is a bit too conservative for most people. Of course I do not know your circumstances. I am very bearish on the market and think we are in a secular bear market than is going to last many more years. I have my 27 year old daughter in treasuries because she has no time to manage her account. It sounds like I may be talking out both sides of my mouth. I am simply saying that if one is watching the markets and managing their accounts, I think a minimum of 25% in stocks would be good.
If you are retired and depending on this money for living, don't put any in stocks, buy treasuries, and go fishing.
Covered Calls with LEAPS (as opposed to stocks)
My trading involves lots of covered calls. However, I tend to take a long term perspective on my options. This is opposite to most options strategies, but I like it. In that vein, I thought I would introduce a LEAPS options strategy that is useful for fairly conservative money looking for excellent returns. There is risk of course, but I would say less risk than stocks in general. As well, I am sure this is covered in an options book somewhere, but I have not read it. Just something I have been thinking about.
What we want is a stock that is depressed, and that we feel has excellent rebound prospects. We buy the LEAP as far out as we can. The Strike 2010's right now. Let the stock rebound, and therefore the LEAP increase in value. Then, the covered call strategy kicks in. Use the LEAP in the same way as a stock, and write calls against it.
As example let's say the LEAP was bought for $15 and rebounded to $20. You write a call for $1.50 against the LEAP. What you have done is decrease the cost basis of the LEAP by $1.50 to $13.50. You could allow yourself to be called out for a nice profit and move on. Interactive Brokers will sell the LEAP against the option if assignment is chosen, so it's just like a stock there. Even if your brokerage does not do this, you merely need to manage the position and sell the leap, buy back the call near expiration, when all the time premium is gone. (FWIW, I have not had IB take a LEAP from me on assignment as yet)
Now, assume you want to keep the LEAP. What I propose is that you let most of the options premium dissipate, and you write a calendar spread to roll over the option to the next month's expiration. By rolling over, you gain say $0.50. This has the effect of reducing the LEAP's cost basis to $13.00, and it will still get called out at the same strike price, only one month further out. You can keep doing this until December 2009. (one month before the expiration on the LEAP which is January 2010) That is 20-22 months. If you can get $0.50 per month on each successive calendar spread, you will collect around $10-12 in premiums over the course of the strategy. Your original cost was $15 and your strike is whatever you have been playing with. So, what we are looking at here is a rate of return of around 80% in less than 2 years. In reality, you can get much higher. AAPL for instance, will yield $5-8 per month in time premium.
Once the December 2009 call is written, you are looking to let the position get called away.
This is a fairly conservative strategy for a "buy and hold" type of investment. It has also been very simply explained. There are pitfalls and risks that are inherent in every stock strategy, and it is a bit more risky than a plain old stock-based covered call strategy. However, you don't need to commit the full value of the stock to the strategy. Only the value of the LEAP.
I would be interested in hearing from others what you think; and I am especially related in any pitfalls you might think of.
Thanks.
Some things never change.
http://en.wikipedia.org/wiki/Suze_Orman
In 1980, a long-time customer gave Orman a loan of $50,000 to help her fulfill her dream of opening her own restaurant. Orman invested the money at Merrill Lynch, however four months later Orman was broke again after, she claims, she was swindled by her stockbroker.
(she made the money back by taking a job with, guess who, Merrill Lynch)
and what morons would put a 90 year old in 100% equities anyway!? I agree completely.
It's ML that's handling her accounts. I've asked to see the account statements. He says the guys doing it are "really smart" but WTHDHK!
...My buddy -- he doesn't understand anything on the monthly statements... he doesn't really know what an option is...
I need to buy him some margaritas I guess and get a hand on the statements and have a look.
There are people running 30 minute infomercials (ads) in Dallas area on local television saying "come to my seminar -- learn about covered calls...."
these things always make one wonder........
How much is she paying in commissions?
If he's not churning her, either they did some bad picking or the downturn might be temporary. If he's churning her portfolio to make commissions, she's heading the way that Suze Orman claims a broker did to her 30 years ago, when she turned a substantial sum into nothing in short order.
I'm thinking that if he was more interested in Mom's welfare than his commissions, he might have given her a short put portfolio instead of the equivalent in covered calls.
The broker that I used to cross-refer with probably would have had a 90 y-o heavily in CDs or bonds, mostly tax free munis if she was in a high tax bracket.
There is a good bit of liability potential if a broker advises a client to put their money in vehicles which are "not appropriate for the investor's situation".
No, Taxmantoo, DNDN pays no dividend, the company is not profitable, at this time.
Jim
gtober, thanks. I will keep it light.
Actually, I see something wrong. I should have written "less commissions, PLUS interest", as that's a credit trade, with $5.44 coming in the account now and $5.00 going out in January.
I just keep thinking there must be a catch.
Does DNDN pay a dividend that would make the short shares costly to hold?
I have a friend -- his 90 y.o mom sold her house for a million bucks in Highland Park -- moved to retirement home... handed check over to broker -- broker has advised son into writing CCs against mom's new stock portfolio -- he said "mom" has been losing about $20k a week since December 20th.
I don't recall seeing any options trades on a 1040 Sch D that wasn't my own, and the last time I had to deal with it on my return was in 2000. I got pretty good at calling index swings and went away from trying to arbitrage skewed option pricing and changed to futures speculating.
I can see this thread is going to quickly become as good as your other one.
rros, I think it is unwise to go 100% any strategy for your entire portfolio. Especially one you are just learning about. That said, in terms of risk, covered calls is one of the lowest risk strategies one can undertake for trading.
Nothing wrong with it, Taxmantoo.
Jim
TMT, do You advise any clients writing covered calls? Know any that are getting such advice or broker help?
What's wrong with this picture?
Short DNDN 5.46 bid.
Buy Jan 5 call 2.55 ask.
Sell Jan 5 put 2.53 bid.
Profit 0.44 less commissions and interest.
Unless there's something strange about the options, the puts are way overpriced.
One more for the experts...
I have no experience in buy-write strategies therefore cannot assess the risk. Those who have been at this for a considerable period of time may have an opinion. In a portfolio say of, $100k., is it crazy to play with the whole pool of money?
I need some advice regarding money management. Like if I were going just long or short (naked) I would only use a TOTAL of 10% to 15% of that pool and then split that into micro plays of $2,500 each. The other 85/90% would be splitted in more conservative ideas (not options, perhaps CDs, bonds and cash). But here, I can see that there is more leeway as opposed to a high chance of total loss if playing OTM or a more than average chance of a good loss if playing straight ITM options.
Thank you, both!
Both replies really useful. My conclusion: if unwinding, better to unwind completely and not risk leaving money on the table (for large ITM runs). If slighlty in the money or ATM, leave it alone and get called or buy back the now inexpensive options and live to play another month/strike.
This reminds me I should have learned to play poker better.
>>do you still wait till expiration or you unwind your position?<<
That depends on several factors. The main factor for me is how much premium is still in the option. Here is an example of one I did today.
HERO - I sold the 22.50's probably when Hero was near 22.50. The stock is at 26.30 earlier today. The 22.50 are now selling for 4.10. 22.50 + 4.10 = 26.60. There was only about 30 cents premium left. Oil stocks had a nice run today. Since most of the premium has been earned and I could use the cash better else where, I bought back my options. In addition, now without the options and HERO trading at recent highs, I sold the shares as well. If the stock was cheaper, I may have sold a higher strike instead.
One thing I did not want to do, is buy back my option and remove my downside protection, and then see the stock drop back down after this little rally we saw. That has happened too many times to me.
The way I play it depends on how ITM the calls become. If I want to keep the stock, and the options are just barely ITM, then I wait until the Friday of expiration and buy the options back for pennies, since all the time premium is gone.
If a stock rises and is well ITM with the options I sold, then I let the stock get assigned. I won't chase it.
Scott
Joe, if the stocks moves up and the options become in the money... do you still wait till expiration or you unwind your position?
SEED - long at 9.21. China food supply play. Earnings Wed. Small starter position. Sold the Mar 10's for .65
Interesting presentation.
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001157523%2D07%2D011724%2Etxt&FilePath=%5C2007%5C11%5C28%5C&CoName=ORIGIN+AGRITECH+LTD&FormType=6%2DK&RcvdDate=11%2F28%2F2007&pdf=
Hi ajp, See my post #19. I closed out two I think. The rest have March calls sold. I am just starting to consider April on new positions.
Yesterday I researched 100 China stocks. I came away with a list of 15-20 or so for ideas. I will post later.
Have you sold or still holding calls? Are this leap or March calls? At what price?
Thank you, Joe.
You have clarified many of my doubts. I now feel that it is really important to define to what extent one wants to really hold the underlying paper. And one thing you stated that I have missed... if things do not go completely right one can still write calls for months to come :)
XMSR - The other day a friend asked me about XMSR. One critera for entering a covered calls is that I don't mind owning lower. Sure, if the SIRI/XMSR merger gets approved, XMSR could easy bounce up and you would collect a nice OTM premium plus gain.
I don't want to own XMSR lower. I think the merger creates one of the worst balance sheets I have seen or heard tell of. The only way this merged company will ever be successful is if they file bankruptcy and reorganize with the current shareholders getting nothing. There are simply too many shares issued and much too much debt to ever become profitable or justify a price above a buck a share.
I would not be interested in selling calls on XMSR...never...never ever. lol!
(BTW, I am not passing judgement on satellite radio. My opinion is solely based on the financials.)
>>Finally, could you narrow down whether it is better to play ITM or ATM options in regards risk/reward?<<
I think it depends on the play. On the DNDN idea the other day. The 5's gave a great return with good downside protection. However, the 7.50's did not give quite as good downside, but allowed you to partipate on a good amount of upside in exchange for less protection.
ADS for example, I split between ATM and ITM. I do favor ITM at between 4-5%. I think if one gets too greedy, always swinging for the fences, you are going to have trouble showing good consistent returns.
I do tend to go after stocks that have corrected. Some, and more recently many, are former high flyers. Of course the more volatility, the higher the premiums. I have no problem with stocks being called away. I think my hedge strategy allows me to be a bit more aggressive in a down market.
What I look for is a sectors I think I good upside. then look at stocks with projected growth rates above 20%, with PE's below 20. (PEG of 1 or less)If I have that, I feel I am buying value, and in the long term I will gain.
The YGE example is a good one. Would much rather be taken out for 7.4% gain if taken out at 17.50, or sell OTM 20's for 5.7% if the stock stays here? The first gives me downside protection to 16.14. My upside is capped at 7.4%. The second choice gives me downside protection just 17.34, but the upside is a possible 14.5% if the stock gains 8.8% here to $20. With what I think about YGE, I think I would go for the later. If the stock goes lower, my new cost basis is 17.34. Next month I sell again. Hopefully, if I still believe in the stock, after a month or two I make a profit or get out with a breakeven.
rros, Thanks for joining us. Good questions. Probably best to relist my current plays and make comment about each one. Also, to show my commitment to each trade I will show either 1/4, 1/2, 3/4, or 'full’ positioning. Keep in mind, I just moderate this board because I have a strong interest in the potential of this strategy. I don’t put myself up as the expert and I plenty to learn myself. Some of my positions may be impulse buys that I may now regret my entry. But, that is one of the nice things about covered calls, they allow you a little leeway to screw-up. Lol!
CHK, SOLF, TRA, PGJ, FLR, MNTA, SNP, ADS, JRJC, CY, RIG, ESLR, FTK, HERO, LDK, MDR, NOV, PTEN, TWM, DUG, UNG, YGE, C, PTEN, WCG.
CHK - Huge insider buying and great holding in Natural Gas. I believe natural gas has a great future. Long term hold for me with a full position. I typically buy the calls back if they look to expire ITM.
SOLF – ¼ new position. Beaten up solar. Valuation are now decent. 312% revenue growth last quarter. I think solar will continue to be huge, especially in China.
TRA – ½ position. Agriculture / Chemicals. Another huge market ahead. Valuation are high in this sector. I am waiting for a pullback to add more in this area. Just missed MOS a couple of weeks ago. Solid premiums a more stable business.
PGJ –3/4 position. ETF for China. I think the recent pullback in China stocks is a buy op. May think the Olympics will be the end for China stocks. I think it will be a new beginning as funds continue to leave the slowing US economy. Nice premiums with strikes at every dollar.
FLR – I closed out my position Friday. I believe strongly in the concept of Peak oil theory. I think those that provide the ‘picks and shovels’ to be best positioned. This one bounced strongly from my buy and the premiums were nearly squeezed out. I made about 5% for less than two weeks.
MNTA – ¼ position. Speculative long position on hopes of drug approval. Took a loss on the drug delay. Sold half and playing CC’s on the other half. The new DNDN play would fall in this category as well.
SNP – ½ position. China oil/chemical play with decent premiums. Bought on pullback of China stocks and oil stock pullback.
ADS – ½ position. Seems like a stable business in good times and bad. BX buy-out appears to be still in play. Stock offers good value here. I bought it when it got thrown to the mat when it appeared BX was backing away from the deal. $60 stock before the buy, Mr. Market took it down to $40 when holders were dumping in fear. What does Buffett say, “Be fearful when investors are greedy. Be greedy when they are fearful.”
JRJC – ¼ position. Beaten up China play with good fundies. If China is the next world power, JRJC services should be much in need for those wanting to invest in this growth (my hand held up).
CY- ½ position. Another beaten up solar play. Last quarter’s rev’s up 50+%. I love to see strong revenue growth. Strong earnings typically follow. CY owns 40 some % of SPWR that does not seem to be fully valued in this stock.
RIG- full position. Deep water driller. Great potential – just came out with fantastic report that supports their niche and those that provide services to them. I will not chase this one much higher. If still at this level at expiration, or as the premiums get squeezed out. I will take the profit and wait for another pullback to get back in.
ESLR – No position. Closed it out to concentrate on China based solars. I just felt they were along for the ride. I think others have better fundies. JMO.
FTK- ¾ position. Beaten up oil services stock. Good value. Projected revenue growth next year of 44%.
HERO- ¾ position. Another oil stock. Strong growth potential. Premiums are just so so. As long as I can get 3-4% I will probably keep. Good value.
NOV- Full+ position. My favorite, most solid oil services stock. Recent pullback offered good add potential. This is a keeper.
MDR – Full+ position. Ditto the what I said about NOV.
PTEN – ½ position. Nat gas land driller. Twice as many gas wells are producing today than 5 years ago, producing basically the same amount of nat gas. Good potential for growth as the wells drilled get less productive.
YGE – ¼ play. I will probably add to this one – maybe not. CSIQ is on my list for tomorrow.
C- ¼ position. I hate financials. If I do want to own one, I want one that has strong international exposure. I hope to be out of this one soon. 25’s sold. Please call y shares away.
WCG – ¼ position. What I great buying op when the market tossed this one to the curb over some Justice Department and Medicare issues. $120 stock that got knocked down to just below my buy at $22. Great premiums as long as the uncertainty remains. Their issues are slowing being put behind them.
TWM and DUG. Nearly full positions on both. I held these to last because these are my insurance plays. Both are Ultra-short ETF’s (meaning they move 2X the index they track). Being ultra they give me more bang for my buck so I only have to buy half as many shares.
Now what would be the perfect covered call portfolio? This goes to your question about market timing. Everyone that is a good market timer, raise your hand. Hmmm….I don’t see any hands raised. The perfect CC portfolio would have stocks that pay good premiums not lose value by expiration so you can collect all your premium and not lose on the share valuation side. TWM and DUG are my portfolio insurance.
TWM because it represents the Russell 2000. I think domestic stocks are going to be more pressured from an economic downturn than those with more international exposure. The Russell 2000 represents more of those companies.
DUG is the ultra short oil sector. The more oil/energy shares I hold – the more DUG I will hold. When DUG gets high. I sell a few calls on the position. When TWM reaches resistance, I sell some calls on those too. When the market is down, my covered call port is much better protected to the downside with the inclusion of these shares.
This board is now FREE! IHUB's Matt graciously agreed to change it from a premium board. Thanks Matt!
Hello Joe, happy to join here...
I am interested in learning the raw concept of profiting from CC. I checked your trades in-depth and noticed your preference for ex high-flyers. Could you share with us what is your reasoning for chosing specific stocks? Is it an attempt to curtail downside risk?
It also appears most of the stocks -even if beaten down- do have the wind behind their back either because of good fundamentals or market projections. Take YGE on photovoltaics. It seems your experience does favor being called away since odds are some of these stocks would improve as we move forward.
Should this be our frame of mind when focusing on CC?
Finally, could you narrow down whether it is better to play ITM or ATM options in regards risk/reward? Who wants 11% in a month playing ATMs if the paper can crater? Are you also taking into account the general state of the market? Take todays market... it appears we are at risk for a larger downshift within a month or two. I like what you are doing but I am also afraid these are times when 30 days can mean simply day and night.
Finally, I have noticed a few of your plays were slightly OTM letting you speculate with a minor percentage of stock appreciation. But then, like on YGE the stock has now fallen $1 behind your entry point. So, in general, is it safer to just go with ITM options and have a greater chance of being called away? Case in point. Today's YGE play
in @ 18.39
March 17.50 calls @ 2.25
Called at 17.50 (18.39 - 17.50= .89)
2.25 - .89 = 1.36 / 18.39 = %7.40 minus commissions.
Your feedback/input is greatly appreciated.
STV - Long @ 23.80. Sold the MAR 25's for 1.40. 5.9% return if the stock price stays here 28 days from now. Downside protection to 22.40. 22.5's would be a safer bet. Sell the call for 2.60. Gives you a 5.5% return if taken out at 22.50. Downside protection to 21.20. Many of these China stocks have been taken down to compelling values. This one grew revs 100%+ and has a forward pE of near 20.
China Digital TV Announces Unaudited Fourth Quarter and Full Year 2007 Results
http://biz.yahoo.com/prnews/080221/cnth023.html?.v=19
Highlights for Fourth Quarter 2007
-- Total revenues in the fourth quarter were US$19.7 million, an increase
of 102.4% from the corresponding period in 2006 and 36.4% from the
third quarter of 2007.
-- Net income for the fourth quarter increased to US$12.9 million, an
increase of 235.4% from the corresponding period in 2006 and 46.5% from
the third quarter of 2007.
-- Basic earnings per ADS (each ADS represents one ordinary share) were
US$0.23.
-- China Digital TV shipped 2.6 million smart cards during the fourth
quarter, an increase of 37.6% from the third quarter of 2007.<<
From one of the professors today at Minyanville.com
"Take note of China Digital TV (STV) which posted 4Q earnings above analyst expectations.
Also of note is that market share increased as well, rising more than six points. As stated yesterday, the stock is wrestling with near resistance on the 50 day. I think any minor change in market sentiment to a more positive tone would put a much more favorable light stocks like STV as beat and raise quarters are becoming somewhat scarce lately.
I'm a buyer on any material market related weakness. "
Jim...I did the DNDN in my SEP IRA...thanks for the post.
Scott
XRM is a current CC position.
Beaten up high dividend payer that is bouncing around 5:00. On my third round of selling $5 calls when they go just ITM...today now OTM
Small % play for now.
Jim, Great idea! Interesting biotech with prostate drug in the works. Downside protection to 2.90. Risky, but worth a speculative play. If the drug gets approved you keep $2.10. If it doesn't, it probably won't fall below $3.00 as they have other drugs in the works. Thanks.
about DNDN-
Dendreon Corporation, a biotechnology company, engages in the discovery, development, and commercialization of therapeutics that harness the immune system to fight cancer. Its product portfolio includes active cellular immunotherapy, monoclonal antibody, and small molecule product candidates to treat various cancers. The company's product candidates include Provenge (sipuleucel-T), an active cellular immunotherapy that is in FDA priority review status for the treatment of asymptomatic, metastatic, androgen-independent prostate cancer; and Neuvenge (lapuleucel-T), which has completed phase 1 clinical trials for the treatment of breast, ovarian, and colon cancers. Dendreon also has various products in preclinical studies, which include Trp-p8 for the treatment of lung, breast, prostate, and colon cancers; CEA for the treatment of breast, lung, and colon cancers; CA-9 (MN) for the treatment of kidney, colon, and cervical cancers; and Anti-Serine Protease for the treatment of multiple cancers. The company has collaborative agreements with Genentech, Inc. for the preclinical research, clinical development, and commercialization of products derived from trp-p8, an ion channel found in prostate cancer cells; and with Amgen Fremont, Inc. for the discovery, development, and commercialization of human monoclonal antibodies against a membrane-bound serine protease. Dendreon, formerly known as Activated Cell Therapy, Inc., was founded in 1992. The company is based in Seattle, Washington.
Joe, If you want a nice premium, sell the DNDN January 2009 $5.00 (strike) Call Option, now at $2.30 bid, with the stock at $5.20, that gives you over a 40% gain, on the option and then if you are not called, you can write some other Option.
Jim
Discouraged is right. I was doing what my original mentor taught; look for stocks with very premiums and sell just OTM calls. for 30-60 day expiry. Hit and miss proposition since these were high beta stocks, and it was 2001-2002, and the high betas were getting killed. I just started dabbling with selling CCs on a few of my high dividend yield core holdings.
Since I have 2, soon to be 3, jobs (my own small companies), I may not post everyday. But I will contribute what I can.
Scott
Here are the stocks I currently have calls sold on. Yikes! I did not realize I had so many spread over 6 accounts.
CHK, SOLF, TRA, PGJ, FLR, MNTA, SNP, ADS, JRJC, CY, RIG, ESLR, FTK, HERO, LDK, MDR, NOV, PTEN, TWM, DUG, UNG, YGE, C, PTEN, WCG.
If anyone is interested why I am holding any of the above, I would be happy to answer. MNTA is probably the only one I feel uncomfortable about. I originally bought that one for speculation on a new drug. It got delayed and the stock tanked. I have been selling calls on it the last several months and made up a good part of me loss. I think they will eventully get approvaland i will probably just let tem call the stock away when they do.
Hi Scott, Thanks for joining me. I do a little of everything with my Covered call plays. I started doing a few covered calls about two years ago. Got really serious about it last summer. The real eye opener for me is that the most my main CC port has been down the last 8 months has been less than 1%. I love the downside protection.
There are some stocks I want to continue to hold and I sell out of the money calls on. Others I sell either ITM or OTM and don't care if I get taken out or not. Well, actually I do care as if I get takemn out, I realize my full gain I was looking for.
You know, I have looked at several Covered calls sites. Most seem to deal with high premium selections and have little regards for current technicals or fundmentals. If I could get a conservative 3% per month (43% compounded annually) I would be very happy.
Right now I am high on energy plays. I like doing energy and then adding a ultra short etf to the mix to hedge the long holdings. I like solar here now that they have been beaten up. Sure you could get high premiums when they were twice the price but what good is it to get a 10% premiums when the stock could easily drop 20%. Anyone new to covered calls is going to get discouraged quick after acouple losses like that.
So, I tend to look mainly at strong stocks in the oil sector that will give me 4 to 5%.
I will make a list of stocks I currently have sold calls on and post them here.
Joe,
I would like to join you. I have only played with CCs occasionally, but I am very interested in learning and eventually helping point out possible plays.
Is you goal to hold a stock and repeatedly sell OTM calls? Or you do want to sell primarily ITM calls and called out, looking for hte next high premium stock?
My guess on this board dying is the low volatility until recently, in the market. Low volatility means lower premiums.
Scott
YGE - Covered call. Long at 19.39. Sold Mar 20 calls at 1.70.
11.9% gain if taken out at $20. 8.8% if taken out at buy price. Downside protection to 17.69.
Dec 09' projected PE of just 3. Revenues increase of 74% seen this year. Strong support at this level.
About YGE-
Yingli Green Energy Holding Company Limited, through its subsidiary, Baoding Tianwei Yingli New Energy Resources Co., Ltd., engages in the design, development, marketing, manufacturing, and installation and sale of photovoltaic products in the People's Republic of China and internationally. Its products include polysilicon ingots and wafers, photovoltaic cells and modules, and integrated photovoltaic systems. The company sells its photovoltaic modules to photovoltaic system integrators and distributors located in various markets, including Germany, Spain, China, and the United States. It also sells its photovoltaic systems primarily to customers in China. The company was founded in 1998 and is headquartered in Baoding, the People's Republic of China. Yingli Green Energy Holding Company Limited is a subsidiary of Yingli Power Holding Company, Ltd.
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