Systematic Covered Writing

... more than just covered calls!

Option Assigned Examples

THE STOCK: Northern Dynasty Minerals Ltd.

POSITION ESTABLISHED DATE: August 23, 2007

ASSIGNMENT DATE: February 15, 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 as the results include all positions . . .  not just the 'pretty' ones.  

COMMENTS: Back in August there was significant 'chatter' about this stock taking off as far as 'value' in concerned.  Well  . . .  the price on expiration Friday was $10.55 . . . yes . . . three cents higher than August!  Cool, because a SysCW writer is not dependent on capital appreciation in order to end up with a reasonable back to cash gain.  I'd say 18.48% in 176 days is 'reasonable', how about you?

February is generally one of the slower months in terms of assignment activity as so many positions end in January.  In fact . . . knowing this in August led the writer to select the February expiration for this position.  Obviously, the 'math' also worked. The idea of staggering expiration months can help provide cash for new positions, or withdrawals, as needed.

So you tell me . . . was NAK the 'right' stock, or was selling a call below the purchase price the 'right' approach?  Hope you see that the writer does not care if the stock appreciates by three-cents or thirty dollars as the back-to-cash profit remains constant. The writer is happy either way!

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PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN NAK 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: 02/18/08