Friday, February 3, 2012


Today I received notification from my broker (Schwab, for whom I was a Registered Option Principle for a decade), that I was assigned on my INTC stock, well before the option was to expire in April. As I've mentioned before, the desired direction for DITM is slightly down -on the ring finger of the Visible Hand. Slightly up, however, also has its benefits - farther ITM often results in being assigned early, compressing the option duration, and raising the annualized profit. In this case, I bought Intel Nov.1 for $24.18, sold the April 22 call for 4.50, got 1 dividend of $31 - profit was $143 per hundred lot, or 15.75% annualized.
Although most of my accounts are fully invested in DITM, it is probably wise to invest a portion of assets in DITM (the CD or MMF part), so one can take part in market run ups, such as the January climb.
Despite my profligate lifestyle (!) I notice that my total retirement accounts are at a 4-year high (mid-2008), while my smallest IRA - the purest DITM test tube) is at an all time high, adjusted for withdrawals. DITM covered calls seem to get better and better, especially considering the safety net, and only a vicious HFT-driven Flash Crash can imperil it, although much less than with an Index fund, etc.

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