Systematic Covered Writing

... more than just covered calls!

Example Index   Return to Links (The SysCW Home Page)

Back-to-Cash

Option Assigned Example

THE STOCK: NVDA - NVIDIA Corporation.

POSITION ESTABLISHED DATE: August 23, 2006

ASSIGNMENT DATE: March 16, 2007

 

      Systematic Covered Writing      
              . . . More than just covered calls . . .      
      SysCW   Position Tracker        
               
Historical Data Closed Position  
        Stock Cash Total Cash  Annualized 
Date Strategy Status Position Investment Generated Generated Return
23-Aug-06 Initial Stock Purchase Buy 100 NVDA @ 26.07 ($2,615.00)      
      NVIDIA Corporation        
23-Aug-06 Initial Call Option Sell Mar $25 call @ 4.50 Exercised 3/16/07 $440.73 Email 8/23  
16-Mar-07 Stock Assigned Sell 100 NVDA @ $25 $2,482.92 ($132.08) Email 3/17  
16-Mar-07     Net Cash Gain     $308.65 Annualized
205 Days   Net Percentage Gain     11.80% 21.02%

COMMENTS: When positions are established, one of the two possible results is the assignment of the stock. This result is never a surprise, the gain is predetermined.  The position ended exactly as expected.

CONCLUSION: When a position is closed and back-to-cash, the net profit and or loss of a position can be precisely determined. This is because both the long stock position and the short option position have been liquidated.  Until this happens, one really does not know what will be made, or what could be lost.

This portion of the Web site is dedicated to providing the closing activity for every position established and provided to subscribers. To that end, you will find that the number of examples increase monthly.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN NVDA STOCK OR ANY OTHER EQUITY.  THE INFORMATION IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY.  THERE IS NO GUARANTEE THAT SIMILAR TRANSACTIONS CAN BE EXECUTED IN THE FUTURE. INVESTING IN THE STOCK MARKET INVOLVES RISKS, DO SO ONLY WITH A KNOWLEDGE AND UNDERSTANDING OF THE RISKS INVOLVED!

The information provided above is for informational purposes only, and no mention of a particular security constitutes a recommendation to buy, sell, or hold that or any other security, or that any particular security, portfolio of securities, transaction, investment strategy is suitable for any specific person. You further understand that the Covered Writer will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information available on this website may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. Always remember that past results are not necessarily indicative of future performance.

These are the terms of use.  Why are they here?  Because the examples provided are real.  The transactions actually took place.  The dates are real, the positions are real.  Some transactions will have been executed on the day you receive the email.  What you are agreeing to, is the fact that in no way is it being suggesting that you can, or should, enter a similar position.  Why?  Because that would be providing investment advice and the Covered Writer is not authorized to do that.  There is also no guarantee that similar transactions could be executed at any time in the future. Only licensed brokers are allowed to provide investment advice.  Therefore, you are agreeing that the preceding example was provide for 'educational purposes' for the sole purpose of illustrating the Systematic Covered Writing strategies.

Thank you! Bq

SYSTEMATIC COVERED WRITING
Copyright © 2005. All rights reserved.
Revised: 04/28/07