Systematic Covered Writing

... more than just covered calls!

Option Assigned Examples

THE STOCK: Delta Petroleum Corp

POSITION ESTABLISHED DATE:  January 30, 2008

ASSIGNMENT DATE: March 21, 2008

THE RESULTS: The complete history of all Closed Positions is maintained indefinitely in the Position Tracker for each portfolio.  The Tracker data becomes the SysCW evidence manual over time. The results are the results, which means subscribers can gleam the historical merits of the process.  Please note the results include all positions . . .  not just the 'pretty' ones.  

COMMENTS: The writer did 'fudge' a bit on the downside protection with this 51 day position.  The $291.74 premium works out to be 14.33% of the investment . . . so it was close.  Given the market volatility at the time, the writer elected to keep the duration as short as possible, which is why the March expiration was selected. 

If you were to look, you would see that DPTR remained above the $20 strike price during the entire holding period. In fact, the stock traded as high as $25.19 on February 28. This position was held in the online $50k Portfolio. Given the performance of the stock, a new DPTR position was established on March 24, 2007.

Please do remember when annualizing a return there is the assumption that a similar trade or trades could be established over the course of one year. The 83.81% for this position is impressive, but the odds of repeating it over the course of a year are rather slim. Needless to say . . . this was still a 'nice' SysCW Initial Position!

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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 © 2005. All rights reserved.
Revised: 03/25/08