Systematic Covered Writing

... more than just covered calls!

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Assignment Examples

THE STOCK: LEND Accredited Home Lenders Holding Co,

POSITION ESTABLISHED DATE: April 19, 2007

ASSIGNMENT DATE: October 15, 2007

COMMENTS: The duration of this Initial Position was cut short as part of an acquisition by Star Loan. The stock was sold at the existing strike price, and the option simply ceased to exist. Needless to say, a writer can not 'plan' on an acquisition, so the repeatability of this position is a mute point. That does not mean it did not happen, which is why it is being reported, but rather that the annualized percentage is unrealistic, even though mathematically correct.

      Systematic Covered Writing      
              . . . More than just covered calls . . .      
      SysCW   Position Tracker        
               
Historical Data Closed Position  
        Stock Cash Total Cash  Annualized 
Date Strategy Status Position Investment Generated Generated Gain
19-Apr-07 Initial Stock Purchase Buy 100 LEND @ 10.8499 ($1,091.99)      
      Accredited Home Lenders Holding Co        
19-Apr-07 Initial Call Option Sell '08 Jan $10 LEAP @ 3.40 Exercised 10/15/07 $331.74    
15-Oct-07 Acquired . . .Assigned Sell 100 LEND @ 10 $991.48 ($100.51)    
15-Oct-07     Net Cash Gain     $231.23 Annualized
179 Days   Net Percentage Gain     21.18% 43.18%

Remember, there are only two kinds of positions as far as the writer is concerned.  Positions that are CLOSED, like this one, and OPEN or ACTIVE positions, which are simply not finished yet.  Some, like this one, will be called via the Initial Call Option.  Others will need additional 'work' before going back-to-cash.

As mentioned above, due to the reduced duration . . . this holding provided a return that was above the expectations of SysCW.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN LEND 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: 10/23/07