VMC - Adjustment

The following adjustment was made today on VMC:

09-Dec-08 - Buy Back and Roll Out/Up - BTC 1 Dec08 55.00 Call @ -21.41 -
09-Dec-08 - Second Stock Position - BTO 100 VMC @ 76.11 -
09-Dec-08 - Combined Cost Basis - $16,005.00 200 @ 80.03 -
09-Dec-08 - Continued Trade - STO 2 May09 80.00 Call @ 10.31 -

The VMC Dec 55 Call was DITM with little to no time value left so I had to roll it out and up this morning. I let this one get away from me and should have rolled it a lot sooner. It was almost 4 strikes ITM and was in danger of early exercise, which would have resulted in a $2,000+ loss. Being that far ITM I had to average down and buy an additional 100 shares, which allowed me to sell two calls instead of one, but even that didn't help to get a net credit. I ended up with a net debit of about $78 and had to go all the way out to a May09 80 call. However, I avoided a $2,000+ loss and am now looking at a possible $700+ dollar gain if it's called in May, plus I'll also receive about $200 in dividends through May09, bringing the potential gain to about $900.

When an Interim Trade goes up too far, as in this case, the emphasis is more on making a defensive move to avoid the loss than trying to generate income. It's very difficult to generate 1%/month in cases like this. By May09 expiration, this position would have been held for about 1 year. If called it would produce an annualized return of 4.69%, which is well below my goal of 12%, but better than money market rates. Not ideal, but not bad either.

Current Position Summary:

Stock Investment: $16,005.00
Income Generated: $742.60
Percent Income Generated: 4.64%
Annualized Income Generated: 4.69%
Net Profit If Called: $737.60
Percent Return If Called: 4.61%
Annualized Return If Called: 4.66%
Days Held to Expiration: 361 days

Trade History:

19-May-08 - Initial Stock Position - BTO 100 VMC @ 83.94 -
19-May-08 - Initial Call Option - STO 1 Jun08 85.00 Call @ 3.09 - Expired
10-Jun-08 - Dividend Received - DIV 100 Dividend @ 0.49 -
07-Jul-08 - Interim Trade - STO 1 Aug08 65.00 Call @ 0.85 - Closed
14-Aug-08 - Buy Back and Roll Out/Up - BTC 1 Aug08 65.00 Call @ -4.50 -
13-Aug-08 - Interim Trade - STO 1 Nov08 70.00 Call @ 6.80 - Expired
10-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.49 -
24-Nov-08 - Interim Trade - STO 1 Dec08 55.00 Call @ 0.99 - Closed
09-Dec-08 - Buy Back and Roll Out/Up - BTC 1 Dec08 55.00 Call @ -21.41 -
09-Dec-08 - Second Stock Position - BTO 100 VMC @ 76.11 -
09-Dec-08 - Combined Cost Basis - $16,005.00 200 @ 80.03 -
09-Dec-08 - Continued Trade - STO 2 May09 80.00 Call @ 10.31 -