These are my thoughts and opinions on many topics. My passions are the stock market and helping abandoned and orphaned animals. In this world, it seems most things don't make much sense to me anymore. This is my feeble attempt to share all of the above. The blogs will include items that might make you shake my head as well as give you my take on why they happen. Enjoy.

Saturday, January 15, 2011

2010 Covered Call Wrap-up

OK everybody, I tallied up my covered calls that I sold against stocks on my portfolio for 2010. I started using covered calls to bring in some "added dividend" to stocks I already own.

Are you ready for this????

My take on those contracts was worth 8.9% added to my portfolio for the year 2010. The strategy is to buy stocks that will pay a decent divy 2-6% and that I can sell calls against to pull in between 1/2-1% per month. That should give me a minimum of 8% to up to 18% right off the top BEFORE appreciation of share price. I expect something in the middle, say 13%, which is pretty solid and relatively safe with the stocks I tend to hold.

Now I will nix that real quick when the market indicators that I use tell me to get out as this strategy is part of the "capital appreciation and preservation", appreciate capital in uptrends, preserve capital in downtrends. And yes I will post when that happens and give fair warning before much damage is done to the market and the portfolio.

I will attempt to keep you all posted with my positions and calls sold in 2011.

OK now to the calls I have sold with Jan 20 2011 expiration:
PEP $67.50 Calls
GIS $37.50 Calls
C $5 Calls (I expect these to be exercised unless the market reacts poorly to the Citi earnings report this upcoming week)
I will also sell calls against NLY $18 strike this week for whatever the going price is, I only expect .20/share.

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