Systematic Covered Writing

... more than just covered calls!

Example Index   Return to Links (The SysCW Home Page)

Back-to-Cash

Option Assigned Example

THE STOCK: Micron Technology, Inc.

POSITION ESTABLISHED DATE: September 15, 2005

ASSIGNMENT DATE: January 19, 2007

ASSIGNMENT: The complete history of the position is maintained indefinitely in the Position Tracker.  The Tracker becomes the SysCW evidence manual over time. In this example . . . the position began as 200 shares of LEXR with a long-term LEAP option.  During the holding period, Lexar Media was acquired by Micron Technology, Inc.  The position comes back to cash with the desired annualized return.

      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 Return
14-Sep-05 Initial Stock Purchase Buy 200 LEXR @ 6.2199 ($1,250.98)      
      Micron Technology, Inc.        
14-Sep-05 Initial Call Option Sell two '07 Jan 7.5 calls @ 1.40 Exercised 1/19/07 $270.48    
28-Jun-06     Cash in leu of fractional shares   $7.99    
19-Jan-07 Stock Assigned Sell 118 Share MU for 200 LEXR $1,482.96 $231.98    
19-Jan-07     Net Cash Gain     $510.45 Annualized
492 Days   Net Percentage Gain     40.80% 30.27%

CONCLUSION: When a position is closed and back-to-cash, the net profit and or loss of the position can be precisely determined. This is because both the long stock position and the short option position have been liquidated.  Until this happens, one really does not know what will be made, or what could be lost.

This portion of the Web site is dedicated to providing the closing activity for every position established, and provided to subscribers. To that end, you will find that the number of examples increase monthly.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN LEXR 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