Systematic Covered Writing

... more than just covered calls!

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Option Assigned Examples

THE STOCK: BLUD - Immucor, Inc.

POSITION ESTABLISHED DATE: June 8, 2005

ASSIGNMENT DATE: January 19, 2007

COMMENTS: This could be an example of not giving up on stocks that lose value.  With a purchase price of $33.92, this stock traded as low as $21.55 on November 23, 2005, and the investor without a plan for dealing with loss in value may have liquidated this holding.  The covered writer simply recovered the position and here we are.

      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
8-Jun-05 Initial Stock Purchase Buy 100 BLUD @ 33.849 ($3,391.90)      
      Immucor, Inc.        
8-Jun-05 Initial Call Option Sell Dec $30 call @ 6.20 Expired 12/17/05 $611.72    
19-Dec-05 Continued Trade Sell '07 Jan $30 LEAP @ 2.70 Exercised 1/19/2007 $261.73    
15-May-06     3:2 Stock Split        
19-Jan-07 Stock Assigned Sell 200 BLUD @ $20 $2,982.94 ($408.96)    
19-Jan-07           $464.49 Annualized
590 Days         13.69% 8.47%

Yes, 8.47% is not stellar in terms of a return, but it also is not a loss. The writer contends that if losses are kept to a minimum, then the writer does not have to increase risks in order to reach a desired overall return.  I wonder what a bank CD paid between June of 2005 and January of 2006?  As for as the covered writer is concerned, this is a cash equivalent investment based on traditional asset allocation models.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN BLUD 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: 02/05/07