Systematic Covered Writing

... more than just covered calls!

(The SysCW Home Page)

Option Assigned Examples

THE STOCK: QLGC - QLogic Corporation
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. For this position this history includes the use of the Buy Back & Roll Out & Up strategy, which was completed after the two-for-one stock split in March of 2006.

			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 QLGC @ 33.22	($6,651.00)			$8,660.00
	Current Price	$21.65	QLogic Corporation
8-Jun-05	Initial Call Option		Sell Jan $32.50 call @ 4.20	Rolled 1/06/06	$830.46
3-Mar-06			2:1 Stock Split . . .now 400 shares @ $16.63
6-Jan-06	Buy Back & Roll Out & Up		Buy two Jan $32.50 calls @ 1.70		($349.50)
6-Jan-06	Appreciated Trade		Sell two '07 Jan $35 calls @ 4.60	Now four $17.50	$910.46

	Cash to Date	20.92%				$1,391.42

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 $21.65 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).
Note that 400 times $0.97 or $371 (after commissions) will be added to this position when the $17.50 calls are exercised. You will see this once the position is closed as the data will be updated below.
_________________________________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 QLGC @ 33.22	($6,651.00)
			QLogic Corporation
8-Jun-05	Initial Call Option		Sell Jan $32.50 call @ 4.20	Rolled 1/06/06	$830.46
6-Jan-06	Buy Back & Roll Out & Up		Buy two Jan $32.50 calls @ 1.70		($349.50)
6-Jan-06	Appreciated Trade		Sell two '07 Jan $35 calls @ 4.60	Now four $17.50	$910.46
17-Jan-07	Stock Assigned		Sell 400 QLGC @ 17.50	$6,982.92	$331.92
17-Jan-07			Net Cash Gain			$1,723.34	Annualized
588	Days		Net Percentage Gain			25.91%	16.08%

Another 588 day duration that ended with the stock being assigned. This position includes the use of the Buy Back & Roll Out & Up strategy back in January of 2006. The stock also completed a two-for-one stock split during the holding period. The math is the math . . . the writer can now invest the capital in other SysCW positions.

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