Systematic Covered Writing

... more than just covered calls!

Option Assigned Examples

THE STOCK: DPTR - Delta Petroleum Corp.
POSITION ESTABLISHED DATE: January 16, 2007

ASSIGNMENT DATE: June 15, 2007

COMMENTS: Today happens to be expiration Friday. DPTR is trading over $22, which means the position below will end today. Back-to-cash with the predetermined annualized gain. The market has been good so far in 2007. Any bullish strategy should be generating a reasonable return so far this year, including Systematic Covered Writing.

			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	Gain
16-Jan-07	Initial Stock Purchase		Buy 100 DPTR @ 21.4882	(2,155.82)
			Delta Petroleum Corp.
16-Jan-07	Initial LEAP Option		Sell Jun $20 call @ 4.40		$431.73
15-Jun-07	Stock Assigned		Sell 100 DPTR @ 20	1,982.93	($172.89)
15-Jun-07			Net Cash Gain			$258.84	Annualized
150	Days		Net Percentage Gain			12.01%	29.22%

The difference is SysCW provides the return in a more conservative nature. For this example, the writer gained $258.84 even though the stock only appreciated by about $100.00! As we all know, some stock will appreciate significantly, some just a little. Others may stay at about the same price, while some stocks will lose varying degrees of value. Those are the five things that 'can' happen to the price of the stock when looking at the difference in price from when purchased to when the option expires.
Obviously, in a case where the Initial Call Option is assigned, the back-to-cash profit is not a surprise, but rather a known amount since the position was established. Once again, the writer is not factoring in that the initial premium of $431.73 has been 'in the bank' since day one.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN DPTR 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 © 2007. All rights reserved.
Revised: 07/14/07