Net's Covered Call

[netwrangler]

It looks like I will be 'assigned' this May [5/17] on several of my current covered call positions. This will give me some cash that I need to reallocate.

This gave me an idea:

How about asking the OTF members to help select a Covered Call [CC] position for me — and then posting the status of this position on the OTF.

We are talking about real money here.
The CC position I take will be real, and you can watch.

So...

Here are the criteria for a good CC position:

• You are 'mildly bullish' on the underlying stock.
• The PPS [price per share] is above $10. Sorry if this is a disappointment.
• There is an active market for the options of this stock.
• The bid/ask spread is 'reasonable'.

So, what tickles your fancy?
What stock offers us the best covered call position come May 19th?

Well, I have to make a real time decision.
Give me your best advice.
We shall see how that works out.

[peter518]

I suggest two candidates for your reference:

V & ANR

Good luck!

Peter

[Albert0373]

Originally Posted by peter518

I suggest two candidates for your reference:

V & ANR

Good luck!

Peter

I love ANR, solid company that has been doing VERY WELL this past year.

I brought it up a while back...

http://www.onlinetradersforum.com/sh...ad.php?t=11622

[BetonBeer]

Do you write them for the current month or a few months out??

I think WFR might be a good pick. Jun 70 @ 2.80 or 75 @ 1.50.

Maybe AAPL, SHLD

[netwrangler]

Originally Posted by BetonBeer

Do you write them for the current month or a few months out??

I think WFR might be a good pick. Jun 70 @ 2.80 or 75 @ 1.50.

Maybe AAPL, SHLD

I'll get the money on May 19th. That's the Monday following the close of May options. I'll be looking to establish the covered call position that week, and will look first at JUN calls.

In general, I believe the shorter options work in favor of the writer and the longer options work for the buyer. That's just a statement about premium as a percent of stock price. Obviously, the longer the term, the greater chance of a stock price movement - and that applies either up or down.

Of course, with covered calls, you don't really want a very volatile stock. Slow and steady is much better than a roller coaster — and up is still better than down by a whole bunch.

[wallstreetsedge]

Originally Posted by BetonBeer

Do you write them for the current month or a few months out??

I think WFR might be a good pick. Jun 70 @ 2.80 or 75 @ 1.50.

Maybe AAPL, SHLD

imo.. spot month is best, also i prefer more volatile stocks but rather than use out the money or at the money, id usually go in the money by 1-2 strikes which normally racks up to a good 4% premium. as net said, its usually something that youre mildly bullish on...

there are always solars, gas, aapl, rimm, goog, bidu, qid, qld, cc, yhoo

[Keventerprises]

Originally Posted by netwrangler

It looks like I will be 'assigned' this May [5/17] on several of my current covered call positions. This will give me some cash that I need to reallocate.

This gave me an idea:

How about asking the OTF members to help select a Covered Call [CC] position for me — and then posting the status of this position on the OTF.

We are talking about real money here.
The CC position I take will be real, and you can watch.

So...

Here are the criteria for a good CC position:

• You are 'mildly bullish' on the underlying stock.
• The PPS [price per share] is above $10. Sorry if this is a disappointment.
• There is an active market for the options of this stock.
• The bid/ask spread is 'reasonable'.

So, what tickles your fancy?
What stock offers us the best covered call position come May 19th?

Well, I have to make a real time decision.
Give me your best advice.
We shall see how that works out.

I'm very glad this thread was created! I wish I found it earlier as I have recently become very interested in Covered Calls.

I'm looking at JASO June 25 Calls for $2.20 which is instant money since the stock is at $24.95 today. I haven't had much experience, insight or luck with in the money stocks, but this seems to be an instant discount rather than even money...any thoughts, advice or experience on this would be appreciated!

Also looking at:
SINA Jun 55 for $3.10 on a $54.50 PPS
GTXI Jun 17.50 for $1.85 on a 15.04 PPS
CRME Jun 10 for $$1.10 on a $9.01 PPS

Today I bought SOLF for $21.38 and sold the Jun 25 Calls later in the day for $2.60 on the way up. I also have open positions in SOL w/SOLFF Jun 30 calls for $1.39, and BNI w/BNIFA Jun 105 Calls for $5.20.

I'm really glad to have this thread available, and look forward to putting our heads together and contributing good CC candidates! The worst thing I know of that can happen on a CC is the PPS dropping substantially. Any input, experience or warnings on these or other Stocks is greatly appreciated!

Looking forward to this being a great, resourceful thread.

[netwrangler]

weeell, dogies!

You gave me some great input. I'll deal with changes in my portfolio in this post, and cover suggestions and actions in subsequent posts.

Covered Call Assignments:

For sure - CVX
Probably - BNI, XLE, CSCO - these positions were well in the money on Friday, but not yet 'officially' assigned.

New Covered Call Positions:

UPL stock long and UPL JUN 90 calls short. Net entry point was 85.31 before fees.

I have been wanting to invest in UPL since last August - when I first learned about this low cost NatGas producer. That said, This entry point may be a little high. We shall see if the call premium gives me enough premium to cover the downside risk.
I'm ready to roll down from JUN 90 to JUN/JUL 85 if the pps goes south. I'm also ready to bail on the whole position if it looks like I bought on an unsustainable peak.

=====
Next week I'll look at new covered call positions from three perspectives:

• Previously assigned positions - If CVX, BNI, XLE, and CSCO worked for me before, why wouldn't they work again?
• Suggested candidates - I'm delighted that I have several suggested positions to analyze.
• New Covered Call Screen - While chatting with Keventerprise, we came up with a new screen for covered calls. I'll pass of of the above candidates against that screen. In addition, I'll use the screen on a couple of watch lists.

This is fun!

[Keventerprises]

Originally Posted by netwrangler

weeell, dogies!

You gave me some great input. I'll deal with changes in my portfolio in this post, and cover suggestions and actions in subsequent posts.

Covered Call Assignments:

For sure - CVX
Probably - BNI, XLE, CSCO - these positions were well in the money on Friday, but not yet 'officially' assigned.

New Covered Call Positions:

UPL stock long and UPL JUN 90 calls short. Net entry point was 85.31 before fees.

I have been wanting to invest in UPL since last August - when I first learned about this low cost NatGas producer. That said, This entry point may be a little high. We shall see if the call premium gives me enough premium to cover the downside risk.
I'm ready to roll down from JUN 90 to JUN/JUL 85 if the pps goes south. I'm also ready to bail on the whole position if it looks like I bought on an unsustainable peak.

=====
Next week I'll look at new covered call positions from three perspectives:

• Previously assigned positions - If CVX, BNI, XLE, and CSCO worked for me before, why wouldn't they work again?
• Suggested candidates - I'm delighted that I have several suggested positions to analyze.
• New Covered Call Screen - While chatting with Keventerprise, we came up with a new screen for covered calls. I'll pass of of the above candidates against that screen. In addition, I'll use the screen on a couple of watch lists.

This is fun!

Yes, this is very fun!

I have tried and tried to upload the Investools screenshot/snapshot of your UPL, Netwrangler, but I cannot get the Fundamentals to transfer with the image. Any suggestions to upload an htm file would be appreciated.

Anyway, as you said, the P/E on UPL is a little high, some Institutional Investing (Acc Dist) but not alot, overall assesment looks good for UPL.

Your ANR and BEAV look good also Net.
ANR: PPS 68.43, Strike 70, Premium 4.00
BEAV: PPS 39.00, Strike 40, Premium 3.20

Here are the gems I like. Please run these through the 'Netwrangler Callculator'...:

(In order of my feeling of strength, and these are all Jun 21st Calls):

DRYS: PPS 110.78, Strike 115, Premium 8.40. Fundamentals look really good, and it looks like something I would like to own!

JASO: PPS 24.95, Strike 25, Premium 2.20. The Fundamentals look very good, and I'm really interested in JASO.

SHI: PPS 39.98, Strike 40, Premium 2.60. Fundamentals look very good except was trending down from mid October 2007 to mid March.

ELN: PPS 27.05, Strike 28, Premium 2.05. (Or Strike Price of 29 pays 1.70 so you're protected for another $1 to 29 for a sacrifice of only $.35). Even if this hits the lower Strike Price of 28 you make $3.00 and you're protected down to $25.00 if it goes south!

SINA: PPS 54.50, Strike 55, Premium 3.10. Fundamentals look very strong except it's overpriced, and the Sector is not rated well right now. The reason this is last on my list is because I don't know the patterns or status of SINA. I've seen it mentioned on the Forum, but I believe it was shorted at times too. Any thoughts on SINA?

Of mention:

CHL: PPS 86.23, Strike 90, Premium 2.00.

Sorry for taking so long! Please run these through your Net Callculator. Any thoughts on any of these by anyone will be appreciated.


p.s. Please let me know if this attachment works...

[Keventerprises]

I think I got the Screenshots from Investools to upload by converting them to a .pdf file. The charts don't show up directly, but they are visible in the attachment link.

Investools shows the graph, MACD and Stochastic, then to the right Fundamentals including Acc. Dist (Institutional Buying) and several other Fundamentals are shown. A high ratio of good to bad is summarized as a fraction such as 8/2. The bottom color bars indicate sector strength from red to green dated from right to left being current. Green with a high number is positive for the sector and the stock. 3 Green arrows on the graph indicates a buy based on PPS rising, MACD and Stochastic.

Here are the CC's I am watching and mentioned in the previous post:

DRYS Snapshot Full Page.pdf

JASO Snapshot Full Page.pdf

SNI Snapshot Full Page.pdf

ELN Snapshot Full Page.pdf

SINA Snapshot Full Page.pdf

ANR Snapshot Full Page.pdf

BEAV Snapshot Full Page.pdf

UPL Snapshot Full Page.pdf