Systematic Covered Writing

... more than just covered calls!

Assignment Examples

THE STOCK: IOC - Interoil Corporation

POSITION ESTABLISHED DATE: August 20, 2007

ASSIGNMENT DATE: September 24, 2007

COMMENTS: You may notice at times there are numerous positions using the same underlying stock which end up being assigned at the same expiration.  This is because there are several individual portfolios used to create the examples used on the Systematic Covered Writer Web site. A couple of positive aspects of this phenomenon would be the 'repeatability' of the process, as the individual position durations will vary, and the 'consistency' of the thought process.

Here is another cash of taking advantage of the current short-term market condition that allows the writer to have the best of both worlds.  Good downside protection, and a reasonable back-to-cash profit.  As is often mentioned, when short-term positions are annualized, the assumption of reputing the process over and over during the course of a year is required in order to actually reach the calculated return.

Also . . . take note of the advantage of the downside protection, rather than the 'greedy' approach of selling a $35 or even a $40 strike price.  Why is this noteworthy?  As of September 30, 2007, IOC is trading at $31.60. On expiration Friday, it closed at $35.00.  The writer will take the 3.98% gain in 35 days coupled with the $831.23 in protection that was present will the position was active.

Systematic Covered Writing was never meant to be a 'get rich quick', short-term investment process. Those that understand and accept the conservative nature of SysCW will be better equipped for dealing with daily triple digit market swings as we all experienced on numerous occasions this past month.

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PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN IOC 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!

SYSTEMATIC COVERED WRITING
Copyright © 2007. All rights reserved.
Revised: 10/01/07