Systematic Covered Writing

... more than just covered calls!

Example Index   SysCW Home

Back-to-Cash

Option Assigned Examples

THE STOCK: MOS - The Mosaic Company

POSITION ESTABLISHED DATE: January 29, 2007

ASSIGNMENT DATE: June 15, 2007

COMMENTS: Today happens to be expiration Friday.  MOS is trading over $38, which means the position below will end today.  Back-to-cash with the predetermined annualized gain.  The market has been good so far in 2007.  Any bullish strategy should be generating a reasonable return so far this year, including Systematic Covered Writing.

      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
29-Jan-07 Initial Stock Purchase Buy 100 MOS @ 20.81 (2,088.00)      
      The Mosaic Company        
29-Jan-07 Traditional Initial Call Option  Sell Jun $22.50 call @ 1.05 Exercised 6/15/07 $96.74    
15-Jun-07 Stock Assigned Sell 100 MOS @ 22.50 2,232.92 $144.92    
15-Jun-07     Net Cash Gain     $241.66

 Annualized
137 Days   Net Percentage Gain     11.57%

 30.84%

The difference is SysCW provides the return in a more conservative nature. Keep in mind that while this position ended with a $241.66 cash gain, because the strike price was written above the purchase price.  Needless to say, the writer was bullish on this position when the Initial Call Option was sold.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN MOS 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 © 2007. All rights reserved.
Revised: 06/16/07