ETF Covered Calls

No surprises, I was short because I felt this was coming. Have you been keeping track of the banking disasters?

• Citigroup $2.24 billion charge for bad debt.
• Bank of America $1.3 billion fall in earnings – bad investments.
• Washington Mutual $2.9 billion in bad home loans.
• Wachovia $1.3 billion in losses and write-downs.

By my count that’s $7.74 BILLION in losses for these banks and we’re at the BEGINNING of the sub-prime mess. Scary isn’t it? It looks like all my ETFCoveredCall transactions will be assigned and I’ll be sitting in 100% cash with my profits. I need this little breather. Fed meets at the end of October. I might sit on cash till then ;). I’ll update my transactions after market close and I’ll post ETF-Cashinator results too!

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

Luck or skill? You decide but it looks like the 1000 UNG shares I bought last week at $39.60 will be assigned as UNG is now trading at $44.80 (as I write this) so that means I’ll be forced to sell my shares at $40.00. This means I’ll be making about ~$400 this week during this “turbulent” market in addition to the $1200 I made last week. Remember, ETF CoveredCalls allows me to earn a profit when markets are excitedly up (like UNG) and when markets are down (like EEB).

Speaking of EEB, it is currently trading below the $38 strike calls I sold so this means that I’ll have an opportunity to hold on to EEB and sell September or December calls at the $38 strike.

Later after the markets close, I’ll power up the ETF Cashinator to see what the best deals are for September. I hope you’ll tune in later….

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.