Opened MCO Covered Call

I've opened a February covered call on MCO with a strike price of $30. The shares are trading for $29.18, but I bought them in May2009 for $29.85. The shares are zombies left over from an unexercised covered call.

The call went for a fairly low premium of 70 cents. I made $1.96 in premium from the May 2009 covered call, and 30 cents in dividends since then. So, altogether, with today's premium, I've taken $2.96 in income from the shares. That's 9.9 percent, not too shabby for eight months work. . . .



If MCO rises above $30 and the option is exercised at the strike price, then I'll gain an addition 15 cents in profit from the sale of the shares. If the stock stays where it is, then I'll be able to sell another covered call after the Feb. 19 expiration. And if the share price falls, then I'll still have the stock, sitting silently in zombie mode awaiting a comeback.

The shares are trading at the lower end of the top set in May of last year, which was the high point of the 2009 rebound from the prior year's collapse. The top then was $31.79. All in all, I would be surprised to see this call exercised.

I looked into a UNG iron condor, mentioned in today's Watchlist. The premium is too small to make it worthwhile.

I also looked at a bear play in KR, also discussed in the Watchlist. Same problem. Small premium.

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