Systematic Covered Writing

... more than just covered calls!

Option Assigned Examples

THE STOCK: Rambus Inc.

POSITION ESTABLISHED DATE: August 31 2006

ASSIGNMENT DATE: January 18, 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: Pretty simple . . . purchase 100 shares of stock, sell a LEAP option that has a duration of 505 days, and then just sit back and wait.  When called . . . the back to cash gain, on an annualized basis, ends up being 22.47%.  Would it not be nice if that all could work out like this RMBS position.

The general philosophy of SysCW is based on accepting significant downside protection, and a reasonable annualized back-to-cash gain, in lieu of trying to continuously being right with short-term positions.

You do not have to agree with this, but if one was that confident in a short-term play, then they would make substantially more money if they just bought the stock or the naked calls, and sold them when the anticipated appreciation took place. The writer takes the approach that sometimes the stock will appreciate, and sometimes it won't . . . we call this 'nobody knowing', and accept it as part of the business we are in.

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PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN RMBS 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 © 2005. All rights reserved.
Revised: 01/23/08