Monday, March 18, 2013


I should have known when I recommended to a friend Saturday at the SF Options Group that I had just bought UVV - Universal Leaf tobacco- which had been one of my 10 big losers over four years, that it would bomb again. Luckily, it's in the DITM account. It fell nearly four points today on a downgrade (Schwab has it as a rare "A" stock), so it fell just below my Sold Call of $55. Might now be a better buying opp.

J P Morgan got called away at expiry (ran up too far to roll out) - a mere   8 1/2% annualized return from Oct.1 (nearly 6 months), lowering my average. But still better than MMFs. Bought 200 at $8269, sold Calls for $908, dividends of 120 (2); called away at $38, to net $350.

Also called away was Hasbro, which I held for 11 months - rolling UP a strike. Its annualized was a little better than JPM - 8.74%. With the VIX at a 2007 low (!!!) of 11+, not much IV in the stocks. Still, the dividends plus  a safety net (see UVV above), makes it worthwhile for most of my assets.

Friday, March 8, 2013


In the previous post the unusual event of a partial call-away of TAL was noted - a few days later it happened again with WMB. Apparently that was all the investor/marketmaker needed. Hopefully this is not a trend, as it will increase commission costs slightly.

Today, with STX (Seagate) hopefully going ex-dividend very soon (still not declared from Dec.12, 2013), it has been raised twice the past year, is rated B by Schwab, but still should be hedged. Therefore, the March 27 strike call (5 points ITM) was rolled UP to the 28 in Sept. The call alone should garner an 8.8% annualized return (over the six months), plus the dividend (2), would be nearly 15% - more if called away in June.

Nota bene: Despite excellent returns so far this year in DITM, the question has to be posed: is trading really worth it? With the new GI Bills (Gov't Intervention), the logic of a trade is such -
Do a Buy/Write giving up the bid/ask spread; pay commission(s); if profitable, pay state and federal taxes on it, pay ( in my current case) a tax preparer big bucks to analyze the trades (brokers do not have to report cost bases in options until 2014, so Gain/Loss has to match 1099B). Not to mention any losses or break-evens. Once again our wise solons are contemplating a transaction tax again.  

Tuesday, March 5, 2013


In an unusual circumstance, the most recent call-away came on two separate days - the 1st and 4th of March. It was 100 shares each of  TAL (Tal Int'l). However, since the return was an annualized 24.52% I shouldn't complain of paying two commissions. Purchase price in mid-Oct. was $6909; net return after rolling UP a set of calls was $706, net of all commissions. If extended over twelve months, not five, the return would be nearly 25% with the same money.

Kinda makes up for any past or future losses that may happen.