A: The German.
Between the European issues referenced in the joke above - I found it in the Washington Post last week, but misplaced the source - and the inability of the "Super Congress" to reach a budget deal in the US, the markets took a major hit last week.
With my account fully invested in positions, I looked for an opportunity to do something to help continue progress on rescuing my IRA, and what I decided I could do is to take some of the covered calls off of the table as their premiums declined in value quickly. Targeting my December calls, I found three that I could buy back for a net profit. I also found one January call to buy back.
- 2 GE 17.50 Jan 2012, sold for $137 bought for $72; profit $65
- 4 AA 11 Dec 2011, sold for $124, bought for $52; profit $72
- 2 DIS 37 Dec 2011, sold for $155, bought for $44; profit $111
- 2 CSX 22.50 Dec 2011, sold for $96, bought for $45; profit $51
While this isn't a core element of the covered call strategy I adopted for my account, these profits will add to my returns, and I can now look for new covered call situations for them. The pure execution of the strategy would have been to keep the calls until they expire.
I hope to execute replacement trades in the next week, but will probably wait a few days for the market to stabilize after the series of down days we've been having lately.
If I am able to get these trades done during November, that will be my next post. Otherwise, I will complete an analysis of the account activities to date and report on returns during the first two months of following this strategy.