Monday, November 21, 2011

11/21 Covered Calls

At present I have no open covered call positions.

Over the weekend I posted the pool of stocks that I'll use in selecting my covered calls for December.

But with the congressional super-committee on the budget about to plunge off the cliff of failure, I won't be opening positions today.

Only UNG among my prospects shows a price rise from Friday's close, at nearly 2%. The rest are all in loss territory, led -- oddly -- by foreign equities: RSX, which tracks the Russian market, and BIDU, China's gigantic counterpart to Google, each down around 5%.

And UNG isn't a position I would open, based on the chart. It is ensnared in a declining channel that began last June, within a long decline that began in 2008. A growth position only for traders who can stand on their head.

All but three of my November covered calls were exercised or assigned. The expirations allowed me to hold over shares of BIDU, LVS and RIMM, none of which are meeting my criteria any longer.

I've been considering using weekly options for at least some of the holdovers, so I can ditch them early while getting some income, and I must make that trade on Tuesday if ever. Because of Thanksgiving, after today's close the PM-settled weeklys will have only three trading days remaining.

As for the rest, I'm looking for the slide to halt and give some sign of a reversal before opening any December covered calls. If that doesn't happen, then fine. I'll take a covered call vacation, the trader's equivalent of a week in sunny Florida.

Covered calls aside...

Other Base Positions

  • Long shares: CBM, PCCC, PKOH, TAST.

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.


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.

No comments:

Post a Comment