Systematic Covered Writing

... more than just covered calls!

(The SysCW Home Page)

Option Assigned Examples

THE STOCK: PDLI - PDL BioPharma, Inc.
POSITION ESTABLISHED DATE: June 8, 2005

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.

			Systematic Covered Writing
			. . . More than just covered calls . . .
		SysCW Position Tracker

Historical Data			Open Position
				Stock	Cash	Total Cash	Value as of
Date	Strategy	Status	Position	Investment	Generated	Generated	4-Jan-07
8-Jun-05	Initial Stock Purchase		Buy 200 PDLI @ 18.1799	($3,642.98)			$4,088.00
	Current Price	$20.44	PDL BioPharma Inc.
8-Jun-05	Initial LEAP Option		Sell two '07 Jan $17.50 calls @ 4.60		$910.46

	Cash to Date	24.99%				$910.46

COMMENTS: As of January 4, 2007, there are about three weeks until expiration. The data above is how the position looks at this time. A $17.50 strike price with the stock trading at $20.44 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).
_________________________________FOLLOW UP_____________________________

			SysCW Position Tracker

Historical Data			Closed Position
				Stock	Cash	Total Cash	Annualized
Date	Strategy	Status	Position	Investment	Generated	Generated	Return
8-Jun-05	Initial Stock Purchase		Buy 200 PDLI @ 18.1799	($3,642.98)
			PDL BioPharma Inc.
8-Jun-05	Initial LEAP Option		Sell two '07 Jan $17.50 calls @ 4.60		$910.46
17-Jan-07	Stock Assigned		Sell 200 PDLI @ 17.50	$3,482.94	($160.04)
17-Jan-07						$750.42	Annualized
588	Days					20.60%	12.79%

In this case, the annualized return is 'real' because the duration of the position was in excess of one year. What is not factored in to returns is the compounding effect. The writer had the full use of the $910.46 from June of 2005 through January 19, 2007.

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