February's Results - Covered Calls

In my first month of writing covered calls on stocks that I own I was able to create additional 1% of 'income'.

February's Results
The calls I wrote were all February 2010 expiration and consisted of

MO $21 strike
DD $34 strike
AA $15 strike
GDXJ $25 strike
NLY $18 strike
MGM $12 strike
MGM $13 strike
WFMI $32 strike

The WFMI calls were exercised at $32, it went from my buy price at $30.52 to over $33/sh in two days after Whole Foods reported earnings. I received 2% premium on the calls and 4 1/2% for the stock appreciation, that's 6 1/2% in 4 days!!!!!

This month's strategy with WFMI: I bought some shares today at $33.83 and sold the Mar 20 $36 calls against that position. I received about a percent on that sale, and IF they are exercised I will have made 6% on the stock, so say a 7% return in a month.

My DD calls were exercised at $34. I got a 3% for the premium and I made 8% on the sale of the stock. I got an 11% total return in less than 2 months on DD. I likely will not buy it back for I believe it is fairly valued and the upside is limited. If it drops a few percent I will entertain buying it again, but not until it drops.

This month's strategy with AA: I sold some Mar 20 $14 strike calls on a portion of my position in AA that I recently purchased at $13.25. I received almost 3% on those calls and if these are exercised I will have made 6% on the stock sale. Basically almost 9% in a little over a month. Not bad. If AA continues to go up, I will sell calls on the other 2/3 of the AA position that I own.

This month's strategy with GDXJ: I like Gold, I like GDXJ, I wanted to sell calls that I hoped would not be exercised. I sold Mar 20 $27 strike price calls. I got 1% for the premium on the calls, IF the calls are exercised, I will have made 8% on the stock for a 9% gain. Keep in mind that I made 1% on the Feb 20 $25 strike calls in three days. So for a month and a half I would make 10% on GDXJ and the call premiums.

I did buy some T at around $25.40 and sold Mar 20 $26 calls and received a 1% premium. I don't expect these to be exercised, but if they are I will get about a 3% win in a month. I am really looking for the dividend at the end of March so I would likely buy it again before the dividend is declared.

My strategy with my NLY position: I want to sell some calls, but I really don't want to sell the Mar 20 $18 calls, heck the stock is at $17.90 and the premium is only 1 1/2%!! I would like to sell some $19 strike price calls but I don't see that happening. I will check out the technical indicators and if it and the market is overbought, I will take a chance on selling the $18 calls.

JC