ETF Covered Calls

Call it greed or call it savvy investing, I just couldn’t help myself and bought 200 shares of SWN at about $45.00 and sold September $45 strikes for $5.54.  That’s not a typo I sold the calls for $5.54 to rake in $1,100 and September is only 7 months away.    I normally don’t ever do covered calls on stocks but I made an exception this one time because of several factors:

1. There is a high probability that these natural gas heavy companies will be picked up by a major.

2. The premium here is a bit ridiculous at 12% for just 7 months away.

3. I believe we are possibly getting to the bottom of this recession and the climb back up might start this year.

4. If the recession is coming to an end, then energy demand will rocket and I’m trying to capitalize on that now!

We’ll see how this pans out in a few months.   BTW, if SWN tanks, I will buy back the calls cheap and hold for the long term.

ETF Covered Calls 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.

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I just sold four contracts on OIH for $5.10 to rake in about $2000 in cold hard cash.   This will amount to a 4.26% return in under 31 days if assigned using $119.52 as my cost basis.  Note:  I’ve already raked in additional cash on this puppy in previous transactions.    I actually anticipate OIH dropping in March below $120 so I can buy back my calls cheap and sell into the future (April, July, January 2011).    My anticipation on drop is based on winter going away thus lowering demand for heating oil and natural gas.   Natural gas prices have been in the gutter lately and that gutter is about to get nastier.   Note:  Long term natural gas and energy prices will spike up and have been priced into markets already so please don’t send me troll posts asking why I am both shorting energy and long energy – it’s complicated!

ETF Covered Calls 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.

© ETFCoveredCalls.com

With natural gas prices continuing to be depressed and likely to go down a bit more I decided to buy into some natural gas producers long and sell short using FCG so I purchased 500 shares slightly below $18 and sold the June $18 strikes (2010) for $1.58 to rake in about $800 or (8.8% return) in less than 4 months.    If we have an economic recovery and energy prices climb up I’ll likely be called and sell my shares, if the economy plunges into the abyss then I’ll be happy holding FCG for the long haul….I gotta make me some money in this market!

ETF Covered Calls 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.

© ETFCoveredCalls.com

Back in December I sold 4 OIHBD (February $120 strikes) for $5.67 and today I closed that position at $1.39 to keep about $4.28 in profits.   If you keep an eye on OIH, it bounces up and down like a basketball and I missed an opportunity a few weeks ago to close my position when OIH dipped to $116.  I didn’t want to miss this opportunity so I bought back and hope that OIH goes above $120 again over the next couple of weeks.    Energy prices are very volatile so I think it’s a prudent move.

ETF Covered Calls 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.

© ETFCoveredCalls.com

Earlier today I purchased 400 shares of OIH at $119.50 and sold 4 February $120 strikes at $5.67.  If called I’ll make about $2,500 in total and if not, it’ll be about $2268 in profit and I’ll hold the shares until the next good opportunity.   I debated with myself on this trade since I like buying OIH under $110 but with the call premium so juicy I just had to take the plunge.   As always now, I’m maintaining a 50k reserve to buy on the dips if OIH plunges below $100.

ETF Covered Calls 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.

© ETFCoveredCalls.com

I sold off my 400 shares of OIH  today at about $120 so I’m back in cash mostly in my Power Account.   I can’t explain it but I got a bit spooked with some international news and I’ve just heard some worse news so I’m sitting in cash.   Watch out….

ETF Covered Calls 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.

© ETFCoveredCalls.com

Earlier today I purchased 50 contracts on UUPCY (March 2010 $24 strikes) @ $1350.00. UUP is the US Dollar Index ETF.  It seems everyone and their dog is bashing the USD and most countries around the world can no longer sustain the fall so I’m expecting a big snap back.   I could be wrong and the USD continues to slide buy I also bought the calls as an insurance against my OIH holdings.     If the USD does crash then oil will come down and so will OIH.   I’m already long/short on OIH so I’m adding additional options in the event of a dollar rally.   We’ll see how that pans out.

ETF Covered Calls 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.

© ETFCoveredCalls.com

I wanted to wait until the end of October before considering some action and since it’s November I decided to dip my toe in the water.  I bought 400 shares of OIH at $118.32  this morning and sold 4 OIHKD (Nov $120) @ $3.68 to rake in close to $1,500 for the day.    If I get assigned I’ll have made $3.68+$1.68 = $5.36 x 400 = $2,144 or about 4.5% in three weeks.   If I don’t get assigned then I’ve averaged down my break even at $114.64 which is a decent place to own OIH.    I’m keeping a reserve of 50k to buy more OIH if it dips below $100 over the next few weeks before expiry but hopefully that won’t happen.

OIH has been very volatile but there is plenty of good money to be made if you can stomach the ups and downs.  At the end of the day, I decided OIH is a good long term play come rain or shine over the next 12 months so I’ll probably keep playing it.   The downside of course is that you need at least $12,000 to buy about 100 shares to even play in the game

ETF Covered Calls 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.

© ETFCoveredCalls.com

I sold 4 contracts on OIHIV (September $110 strike) today when OIH popped up.   I sold it for about $4.35 and made a little over $1700 for the month for about a 3.95% return.   Not bad but if OIH remains above $110, I’ll be assigned and back in cash.   If not, then I’ll keep chugging along with OIH.

ETF Covered Calls 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.

© ETFCoveredCalls.com

Hope!  I sold 4 OIHGV contracts for $4.63 to rake in about $1,840 today in my power account.   This represents a 4% return over a 6 month window since OIHGV is July 09 $110 strike.   Given the state of the economy and markets I figured an 8% return (annualized) is much better than nothing and certainly better than what any bank is paying in interest these days.    If OIHGV expires worthless in July then I’ll sell Jan 2010 $110 calls and if my calls get assigned then I’m back in cash and hopefully that means that the market is on its way to recovery and I’ll have a ton of cash to play with…

ETF Covered Calls 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.

© ETFCoveredCalls.com