Systematic Covered Writing

... more than just covered calls!

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Option Assigned Examples

THE STOCK: TIE - Titanium Metals Corporation

POSITION ESTABLISHED DATE: June 29, 2006

ASSIGNMENT DATE: June 15, 2007

COMMENTS: This Closed Position was held in the online $100k Portfolio, which basically means that subscribers have had the opportunity to view this position since inception.  The unusual aspect of this position lies in the fact that even though the strike price was lowered from $32.50 to $30, the position still ended with a very acceptable annualized cash generation rate.

      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-Jun-06 Initial Stock Purchase Buy 100 TIE @  33.28 ($3,335.00) TDS USED    
      Titanium Metals Corporation        
29-Jun-06 Initial Call Option Sell Dec $32.50 call @ 6.80 Rolled 12/06/06 $671.72    
6-Dec-06 Buy Back & Roll Out & Lower Buy Dec $32.50 call @ 1.90   ($198.25)    
6-Dec-06 Interim Trade Sell Jun $30 call @ $4.70 Exercised 6/15/07 $461.73 Email 12/06  
15-Jun-07 Stock Assigned Sell 100 TIE @ $30 $2,982.95 ($352.05)   Kids
15-Jun-07     Net Cash Gain     $583.15 Annualized
351 Days   Net Percentage Gain     17.49% 18.18%

One thing to realize is that when the writer used the BB&RO&Lower strategy, the stock was trading above the $32.50 strike price.  That 'math' at the time, allowed the writer to generate additional cash while still having a position at 'worked' if assigned. This was all possible because of the amount of the Initial Call option.

PLEASE NOTE THAT THIS EXAMPLE IS NOT TO BE CONSIDERED AS A RECOMMENDATION TO INVEST IN TIE 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: 07/29/07