Monday, January 24, 2011


Last week's option exaspiration brought only one expiry - NOC. The paucity of transactions is explained by my seasonal fear, coupled with annual vacation away from the market, that few trades were entered in the early Fall.
Results were great: 13.6% annualized, after commissions. Here is the trade -
May 24, '10 I bought 200 NOC at just above $60 for $12,147;sold the 55 call (almost 10% below), rolled it once into Jan.(last week), called away at 55, for a $1102 net profit in 8 months.
My latest variation I am testing is capturing semi-annual and annual dividends with a 3-4 month ITM call to keep from an immediate callaway and additional revenue. It seems logical that getting the whole year at once should be more provident than quarterly. I don't know the tax consequences of this, as most of these - which I got from my acquaintance, Harry Domash of the SF Chronicle - Dividend are foreign stocks.
The annual dividend went ex-D Friday on Siemens -SI - I'll probably sell it in the next few days or weeks, depending on its price action. Long stocks usually rise 2:1 versus the short call, so I'm even more ahead if it rises - selling on weakness.
Stay tuned!

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