Covered Calls for Fun & Income

March 22, 2009

March Expiration Wrap-Up

Filed under: Covered Calls — Tags: , , , , — Jeff @ 7:15 PM

I have had better months and worse months. In this market, I would consider this a pretty good month.

AFL – Expired ITM for a 4.84% gain. I entered this on 3/17 and it was held for only 4 days.

CLF – Expired ITM for a 4.25% gain. I entered this on 3/17 also.

LNC – Expired OTM. My cost basis on this is 7.12 and the stock closed at 7.31. It’s currently showing some weakness so I will monitor this on Monday before I make a decision to bail or write another call. I have experienced situations like this where the stock recovered in the week following expiration (moved above my cost basis) and I was able to sell the stock for a very nice overall profit. But, this is an insurance company after all.

UAUA – Expired OTM. My cost basis is 6.49 and the stock closed at 4.48. This stock is very volatile and the premiums on Calls are quite high. I don’t plan on taking a loss on this, but I will wait for a bounce before writing another Call, or if the bounce is good enough, selling the stock above my cost basis.

X – Expired OTM. My cost basis is 21.39 and it closed at 19.72. I entered this 1 day prior to Friday’s expiration with the intent of holding for a while. It has a nice dividend and a high amount of open interest on the options.

For April expiration, I have EXM (my problem child), GERN, TXT and USO.

This expiration didn’t leave much cash in my account so I will be less active in April unless LNC and UAUA make a big move up and I can cash out. Because of the volatility in this market, I don’t plan to look for opportunities until the week of 3/29. But, that doesn’t mean I won’t have anything to say between now and then.

– Jeff

“If all economists were laid end to end, they would not reach a conclusion.” George Bernard Shaw (1856 – 1950)

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