10/24 Covered Calls

This daily posting tracks my covered call plays for November and other base positions.

Today is the first day of a new covered calls month. See my weekend postings for October results and the November pick list.

Covered Calls

sym	phase	trend	adx		200/50	40/10
EWZ
GMCR
NLY
RIMM
SLV

Notes:

I had one hold-over from October. The options sold against GMCR weren’t exercised, and I’ve not yet sold November calls against the stock positon, but I’ll continue to track it in the technical chart.

NLY has been sitting in among my high-yield dividend plays for several months, and I’ve decided to add it to my covered calls mix, at least in months when the stock won’t go ex-dividend. I erred when opening NLY; earnings will be announced on Oct. 27. But I’ll continue to hold the position and take out insurance in the form of a bear call spread.

Technical:

EWZ has broken above its 20-day high but has since pulled back to the breakout level.

GMCR’s sharp decline has brought it to levels last seen in an extended sideways pattern last April. It is now trading at the mid-point of a downtrend channel that began Sept. 20.

NLY continues a sideways trend that began Oct. 7.

RIMM continues a sideways trend that began Oct. 6.

SLV continues a sideways trend that began Sept. 28.

Positions:

sym	entry	strike	premium
EWZ	59.34	55	5.20
GMCR	111.77
NLY	17.96	16	0.52
RIMM	23.33	21	2.96
SLV	30.76	28	2.96

Other Base Positions

• None.

Key

• phase: 20-day price channel phase, with green for bull trend, red for bear trend and yellow for neutral trend.
• trend: Price direction, green for higher highs and higher lows, red for lower highs and lower lows, yellow for sideways, and grey for neutral or ambiguous.
• adx: Average directional index location, indicating the strength, or the temperature, of the trend. Orange for 40 or greater, aqua (light blue) for 25 and up but below 40, magenta (light purple) for 20 and up but below 25, and brown for anything below 20. (Mnemonic: Orange for the overhead sun, blue for the surrounding sky, magenta for sunset on the horizon and brown for the earth.)
• 200/50: The moving average cross, green for the 50-day ma above the 200, red for below and yellow for closely aligned.
• 40/10: The moving average cross, green for the 10-day ma above the 40, red for below and yellow for closely aligned.

About my trading methods

Read a detailed explanation of my analysis method, including trading rules. These don't, at present, discuss my covered call strategy, which is under revision.

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.