Few more Nov Covered Calls for analysis

Three more months to end this year. Time flew by too fast.

Anyways, these are some of the November covered calls (expiration is Nov 21) that may be worth analyzing. Plug & analyse these into the spreadsheet for covered calls.


........ The Following are ETFs ....................

UYG is at 20.4 ; Sell Nov Call Strike Price = 18 ; Premium= 4.50; Return before comm= 14%

UYG is at 20.4 ; Sell Nov Call Strike Price = 17 ; Premium= 5.10; Return before comm= 12%

QLD is at 58.80 ; Sell Nov Call Strike Price = 58 ;Premium= 5.90; Return before comm= 9.6%

DDM is at 57.04 ; Sell Nov Call Strike Price = 56 ;Premium= 5.3 ; Return before comm= 8.2%

UWM is at 48.05 ; Sell Nov Call Strike Price = 44 ;Premium= 7.2 ; Return before comm= 7.7%

UNG is at 34.02 ; Sell Nov Call Strike Price = 33 ;Premium= 3.30 ; Return before comm= 7.4%

SSO is at 54 ; Sell Nov Call Strike Price = 51 ;Premium= 6.40 ; Return before comm= 7.2 %


........ The Following are Stocks ....................

FTO is at 20.67 ; Sell Nov Call Strike Price = 20 ;Premium= 5.3 ; Return before comm= 10.5%

AIG is at 3.15 ; Sell Nov Call Strike Price = 3 ;Premium= 1.15; Return before comm=50%

LCC is at 6.15 ; Sell Nov Call Strike Price = 5 ; Premium= 2.05; Return before comm=22%

DAL is at 7.95 ; Sell Nov Call Strike Price = 7.5 ; Premium= 1.80 ; Return before comm=22%

NT is at 2.55 ; Sell Nov Call Strike Price = 2.5 ; Premium= 0.60; Return before comm= 16.7%

GM is at 9.76 ; Sell Nov Call Strike Price = 9 ; Premium= 2 ; Return before comm= 16%

AMD is at 5.16 ; Sell Nov Call Strike Price = 5 ; Premium= 0.62; Return before comm= 16%

TSN is at 12.69 ; Sell Nov Call Strike Price = 12.5 ; Premium= 1.55; Return before comm= 12%

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Few Nov Covered Calls

Analyze the November covered calls using the above screen capture as a reference.


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Oct CALLs n PUTs

Analyze & calculate the returns for following October covered calls. Strike prices (SP) are mentioned based on the current closing price as of Sept 23.

DDM -SP=55 or 54 ; GM -- SP= 11 ;QLD -- SP=58 ; FTO SP = 20 ; TSO SP= 20 ; DAL SP=10 ; UYG SP=20 ; FLR SP=57.5 ; AMD Sp=5 ; F SP=5 ; GM SP= 10 or 11 ; AIG SP=5 or 6 or 7

Analyze & calculate the returns on selling the following PUTs:

UYG : Sell Oct 16 or 17 PUT ;

AIG: Sell lOct 4 or 3 PUT

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Selling Oct PUTs

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Analyze the strategy of selling PUTs for October. When a PUT is sold, one has the obligation to buy the stock at the strike price should it close at or below the strike price on expiration. So for 10 contracts (1000 shares), one needs that amount set aside or the amount based on the margin requirements set forth by the brokerage in the event the PUT gets exercised at expiration. Or one can buy back the PUT (but to close) to simply close the position.

So assuming 10 contracts for the analysis, calculate the return with margin. Note that the screen capture shows the return without margin.

Also, investigate the probabilities for these positions.
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Writing PUTs: AIG, DAL, MER

Perform an analysis of the following Sept PUTs so as to get an idea about this strategy to either earn premium if Strike Price (SP) is not reached, or if a trader won't mind to buy a stock at a lower price. Of course, margin requirements have to be met with the brokerage firm so as to fullfil the obligation should a stock go down & hit the SP.

Stock: DAL ; Sell to Open PUT for Sept; SP= 7.5 ; credit = 0.75

Stock: MER ; Sell to Open PUT for Sept; SP= 17.5 ; credit = 0.56

Stock: AIG ; Sell to Open PUT for Sept; SP= 15 ; credit = 1.18

The obligation that a trader has is that if the stock closes at that strike price (SP) at expiration, the trader will buy the stock.

This is considered as a way to earn premium if it does not reach the SP, or a way to get a stock at a cheaper price becuase trader has pocketed the premium in advance.

If SP is not reached, trader keeps the premium. The premium received divided by the obligation to purchase is the ROI.

If SP is reached, then:

- The trader owns the stock at a lower price than SP, & can hold on to the stock or can turn around & sell a covered call against the holding.

- Or, if the trader does not want to own the stock & wants to bail out & not purchase the stock, then a reverse order needs to be executed to "buy back" (Buy to Close) the PUT & incur some loss/profit.

Position can be closed at a profit (if stock goes up, PUT loses value) or loss ( if stock goes down, PUT gains value) even prior to reaching the SP by simply buying back the PUTs

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Sept 5 thoughts on a down day

Analyze

.... Covered calls ....

LCC, US AIRWAYS SEPT 7.50 ;
HANS , HANSEN NATURAL OCT 25 ;
AIG, OCT 21
TIE, Oct 12.5

.... Calls ....
Jan 2009 -- BA , the 65 Call , symbol BAAM position looks good. Once the strike issue gets resolved, & the tanker contract comes thru, it will be worth it.

.... Bull Put Spread ....
ICE - Sept Short 80 & Long on 75 for a 9-10% return
SPX - Sept Short 1190 & Long 1185 for a credit of .85 for 5 dollar margin (17% rtn)

.... Condor using 2 spreads ...
RUT , September -- Bear Call leg of Sell 750/ Buy 760 credit = .95 ; Bull Put leg of Sell 670/ Buy 660 for credit of 1.15 ; net credit of 2.1 for a margin of 2

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Covered calls for analysis

Analyze the following October Covered Calls: AEO (SP=15) ; TIE (SP=12.5) ; SBUX (SP=15) ; HUM (SP=45) ; GM (SP=11) ; ; TSO (SP=20) ; BRCD (SP=7) ; INTC (SP=21) ; IBN (SP=30) ; HANS (SP=25) ; SBUX (SP=16).

Watch for reversal in - Oil, energies, airlines, steel, & financials.
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