Systematic Covered Writing

... more than just covered calls!

(The SysCW Home Page)

Option Assigned Examples

THE STOCK: KCI - Kinetic Concepts, Inc.
POSITION ESTABLISHED DATE: August 29,2006

ASSIGNMENT DATE: January 19, 2007

ANTICIPATION: The complete history of the position is maintained indefinitely in the Position Tracker. The Tracker becomes the SysCW evidence manual over time.

Historical Data			Open Position
				Stock	Cash	Total Cash	Value as of
Date	Strategy	Status	Position	Investment	Generated	Generated	1-Jan-07
29-Aug-06	Initial Stock Purchase		Buy 300 KCI @ 31.14	($9,351.99)			$11,865.00
	Current Price	$39.55	Kinetic Concepts, Inc.
29-Aug-06	Initial Call Option		Sell three Jan $30 calls @ 4.30		$1,277.72

	Cash in Hand	13.66%				$1,277.72

COMMENTS: As of January 2, 2007, there are about three weeks until expiration. The data above is how the position looks at this time. A $30 strike price with the stock trading at $39.55 would lead one to believe that this stock is 'going away'. With the strike price below the purchase price, there will be some give back when the option is exercised. The net back-to-cash results will be displayed below (assuming the price holds).
This stock was selected for this covered position after a significant drop in price on August 11, 2006. On that day the stock traded as low as $22.50 a share.
_________________________________FOLLOW UP_____________________________

			SysCW Position Tracker

Historical Data			Closed Position
				Stock	Cash	Total Cash	Annualized
Date	Strategy	Status	Position	Investment	Generated	Generated	Return
29-Aug-06	Initial Stock Purchase		Buy 300 KCI @ 31.14	($9,351.99)
			Kinetic Concepts, Inc.
29-Aug-06	Initial Call Option		Sell three Jan $30 calls @ 4.30		$1,277.72
19-Jan-07	Stock Assigned		Sell 300 KCI @ 30	$8,979.94	($372.05)
19-Jan-07			Net Cash Gain			$905.67	Annualized
143	Days					9.68%	24.72%

Another back-to-cash position. With KCI trading at $44.92 on expiration Friday, the $30 calls were exercised. Now the writer can use the cash to establish a new position. Always remember, the shorter the duration, the less reliable the annualized return as it requires duplication of similar investments and results.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN KCI 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: 02/05/07