ABT - New Position

A new dividend position was established today on Abbott Laboratories (ABT). The following is the trade information, including IB commissions:

29-Jun-09 - Initial Stock Position - BTO 100 ABT @ 47.77
29-Jun-09 - Initial Call Option - STO 1 Jul09 47.00 Call @ 1.37
15-Aug-09 - Dividend Received - DIV 100 Dividend @ 0.40

Abbott Laboratories is a fundamentally solid wide moat company, with 10 consecutive years of positive cash flow, and 36 consecutive years of dividend increases. They declared a quarterly dividend on 6/12 of $0.40, with ex-dividend date on 7/15, payable on 8/15.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CC trade to capture the dividend, since it had a slightly better profit than the CSP.

Summary without the dividend if called early the day before Ex-Dividend date:

Stock Investment: $4,777.00
Income Generated: $137.00
Percent Income Generated: 2.87%
Annualized Income Generated: 65.42%
Net Profit If Called: $60.00
Percent Return If Called: 1.26%
Annualized Return If Called: 28.65%
Days Held to Ex-Dividend Date: 16 days

Summary with the dividend if called at option expiration:

Stock Investment: $4,777.00
Income Generated: $177.00
Percent Income Generated: 3.71%
Annualized Income Generated: 75.13%
Net Profit If Called: $100.00
Percent Return If Called: 2.09%
Annualized Return If Called: 42.45%
Days Held to Expiration: 18 days

Dividend Information:

Ex-Dividend Date: 07/15/09
Dividend Pay Date: 08/15/09
Dividend Rate: $1.60 ($0.40/quarter)
Dividend Yield on Cost: 3.35%

NSC - New Position

A new position was established today on Norfolk Southern Corp (NSC). The following is the trade information, including IB commissions:

25-Jun-09 - Initial Put Option - STO 1 Jul09 38.00 Put @ 1.10
25-Jun-09 - Cash to Secure Put - CSP 100 NSC @ 38.00

Norfolk Southern Corp is a fundamentally solid narrow moat company, with 8 out of 10 years of positive cash flow, and 7 consecutive years of dividend increases.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CSP, since it had a slightly better profit than the CC.

Cash to Secure Put: $3,800.00
Income Generated: $110.00
Percent Income Generated: 2.89%
Annualized Income Generated: 48.03%
Net Profit If Expired: $110.00
Percent Return If Expired: 2.89%
Annualized Return If Expired: 48.03%
Days Held to Expiration: 22 days

COP - New Position

A new position was established today on ConocoPhillips (COP). The following is the trade information, including IB commissions:

25-Jun-09 - Initial Put Option - STO 1 Jul09 41.00 Put @ 1.14
25-Jun-09 - Cash to Secure Put - CSP 100 COP @ 41.00

ConocoPhillips is a fundamentally solid narrow moat company, with 10 consecutive years of positive cash flow, and 8 consecutive years of dividend increases.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CSP, since it had a slightly better profit than the CC.

Cash to Secure Put: $4,100.00
Income Generated: $114.25
Percent Income Generated: 2.79%
Annualized Income Generated: 46.23%
Net Profit If Expired: $114.25
Percent Return If Expired: 2.79%
Annualized Return If Expired:
Days Held to Expiration: 22 days

CAT - New Position

A new dividend position was established today on Caterpillar (CAT). The following is the trade information, including IB commissions:

25-Jun-09 - Initial Stock Position - BTO 100 CAT @ 34.28 -
25-Jun-09 - Initial Call Option - STO 1 Jul09 34.00 Call @ 1.46 -
20-Aug-09 - Dividend Received - DIV 100 Dividend @ 0.42 -

Caterpillar is a fundamentally solid wide moat company, with 9 out of 10 years of positive cash flow, and 15 consecutive years of dividend increases. They declared a quarterly dividend on 6/10 of $0.42, with ex-dividend date on 7/16, payable on 8/20.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CC trade to capture the dividend, since it had a slightly better profit than the CSP.

Summary without the dividend if called early the day before Ex-Dividend date:

Stock Investment: $3,428.00
Income Generated: $146.00
Percent Income Generated: 4.26%
Annualized Income Generated: 77.73%
Net Profit If Called: $118.00
Percent Return If Called: 3.44%
Annualized Return If Called: 62.82%
Days Held to Ex-Dividend Date: 20 days

Summary with the dividend if called at option expiration:

Stock Investment: $3,428.00
Income Generated: $188.00
Percent Income Generated: 5.48%
Annualized Income Generated: 90.99%
Net Profit If Called: $160.00
Percent Return If Called: 4.67%
Annualized Return If Called: 77.44%
Days Held to Ex-Dividend Date: 22 days

Dividend Information:

Ex-Dividend Date: 07/16/09
Dividend Pay Date: 08/20/09
Dividend Rate: $1.68 ($0.42/per quarter)
Dividend Yield on Cost: 4.90%

VMC - Adjustment

The following adjustment was made today on Vulcan Materials (VMC):

24-Jun-09 - Interim Trade - STO 2 Jul09 50.00 Call @ 0.35 -

Current Position Summary:

Stock Investment: $16,005.00
Income Generated: $1,720.40
Percent Income Generated: 10.75%
Annualized Income Generated: 9.25%
Net Profit If Called: -$4,284.60
Percent Return If Called: -26.77%
Annualized Return If Called: -23.05%
Days Held to Expiration: 424 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 - Interim Trade - STO 2 May09 80.00 Call @ 10.31 - Closed
10-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.49 -
12-Feb-09 - Buy Back and Roll In/Down - BTC 2 May09 80.00 Call @ -0.14 -
12-Feb-09 - Interim Trade - STO 2 Mar09 55.00 Call @ 0.54 - Expired
10-Mar-09 - Dividend Received - DIV 200 Dividend @ 0.49 -
24-Mar-09 - Interim Trade - STO 2 May09 45.00 Call @ 2.21 - Closed
04-May-09 - Buy Back and Roll Out - BTC 2 May09 45.00 Call @ -5.80 -
04-May-09 - Interim Trade - STO 2 Jun09 45.00 Call @ 6.50 - Expired
10-Jun-09 - Dividend Received - DIV 200 Dividend @ 0.49 -
24-Jun-09 - Interim Trade - STO 2 Jul09 50.00 Call @ 0.35 -

USB - Adjustment

The following adjustment was made today on US Bancorp (USB):

24-Jun-09 - Interim Trade - STO 1 Aug09 20.00 Call @ 0.49 -

Current Position Summary:

Stock Investment: $3,494.00
Income Generated: $749.30
Percent Income Generated: 21.45%
Annualized Income Generated: 15.23%
Net Profit If Called: -$744.70
Percent Return If Called: -21.31%
Annualized Return If Called: -15.14%
Days Held to Expiration: 514 days

Trade History:

25-Mar-08 - Initial Stock Position - BTO 100 USB @ 34.94 -
25-Mar-08 - Initial Call Option - STO 1 May08 35.00 Call @ 1.39 - Expired
15-Apr-08 - Dividend Received - DIV 100 Dividend @ 0.43 -
22-May-08 - Continued Trade - STO 1 Jun08 35.00 Call @ 0.28 - Expired
07-Jul-08 - Interim Trade - STO 1 Aug08 32.50 Call @ 0.14 - Expired
15-Jul-08 - Dividend Received - DIV 100 Dividend @ 0.43 -
22-Aug-08 - Continued Trade - STO 1 Sep08 32.50 Call @ 0.59 - Closed
12-Sep-08 - Buy Back & Roll Out/Up - BTC 1 Sep08 32.50 Call @ -1.76 -
12-Sep-08 - Continued Trade - STO 1 Dec08 35.00 Call @ 2.19 - Expired
15-Oct-08 - Dividend Received - DIV 100 Dividend @ 0.43 -
22-Dec-08 - Interim Trade - STO 1 Feb09 30.00 Call @ 0.50 - Closed
15-Jan-09 - Dividend Received - DIV 100 Dividend @ 0.43 -
23-Jan-09 - Buy Back and Roll Down - BTC 1 Feb09 30.00 Call @ -0.06 -
23-Jan-09 - Interim Trade - STO 1 Feb09 17.50 Call @ 0.59 - Expired
24-Feb-09 - Interim Trade - STO 1 Mar09 15.00 Call @ 0.24 - Expired
24-Mar-09 - Interim Trade - STO 1 May09 20.00 Call @ 0.60 - Expired
15-Apr-09 - Dividend Received - DIV 100 Dividend @ 0.05 -
18-May-09 - Interim Trade - STO 1 Jun09 21.00 Call @ 0.55 - Expired
24-Jun-09 - Interim Trade - STO 1 Aug09 20.00 Call @ 0.49 -

UPS - Adjustment

The following adjustment was made today on United Parcel Service (UPS):

24-Jun-09 - Interim Trade - STO 1 Jul09 50.00 Call @ 0.65 -

Current Position Summary:

Stock Investment: $7,193.00
Income Generated: $1,186.60
Percent Income Generated: 16.50%
Annualized Income Generated: 7.41%
Net Profit If Called: -$1,006.40
Percent Return If Called: -13.99%
Annualized Return If Called: -6.28%
Days Held to Expiration: 813 days

Trade History:

26-Apr-07 - Initial Stock Position - BTO 100 UPS @ 71.93 - VICC
26-Apr-07 - Continued Trade - STO 1 May07 75.00 Call @ 0.10 - Expired
21-May-07 - Continued Trade - STO 1 Jul07 75.00 Call @ 0.39 - Closed
05-Jun-07 - Dividend Received - DIV 100 Dividend @ 0.42 -
18-Jul-07 - Buy Back & Roll Out/Up - BTC 1 Jul07 75.00 Call @ -0.56 -
18-Jul-07 - Continued Trade - STO 1 Oct07 80.00 Call @ 0.89 -
24-Oct-07 - Continued Trade - STO 1 Dec07 80.00 Call @ 0.35 - Expired
10-Jan-08 - Continued Trade - STO 1 Apr08 75.00 Call @ 1.31 - Expired
04-Mar-08 - Dividend Received - DIV 100 Dividend @ 0.45 -
24-Apr-08 - Continued Trade - STO 1 Jun08 75.00 Call @ 0.94 - Expired
03-Jun-08 - Dividend Received - DIV 100 Dividend @ 0.45 -
07-Jul-08 - Interim Trade - STO 1 Aug08 65.00 Call @ 0.56 - Closed
15-Aug-08 - Buy Back and Roll Out - BTC 1 Aug08 65.00 Call @ -1.53 -
15-Aug-08 - Interim Trade - STO 1 Sep08 65.00 Call @ 2.62 -
15-Aug-08 - Interim Trade - STO 1 Sep08 65.00 Call @ 2.62 - Closed
09-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.45 -
12-Sep-08 - Buy Back & Roll Out/Up - BTC 1 Sep08 65.00 Call @ -3.91 -
12-Sep-08 - Continued Trade - STO 1 Jan09 70.00 Call @ 3.59 - Expired
03-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.45 -
22-Jan-09 - Interim Trade - STO 1 Mar09 55.00 Call @ 0.59 - Expired
10-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.45 -
24-Mar-09 - Interim Trade - STO 1 Apr09 50.00 Call @ 0.85 - Closed
13-Apr-09 - Buy Back & Roll Out - BTC 1 Apr09 50.00 Call @ -4.00 -
13-Apr-09 - Interim Trade - STO 1 May09 50.00 Call @ 4.89 - Closed
04-May-09 - Buy Back and Roll Out - BTC 1 May09 50.00 Call @ -4.40 -
04-May-09 - Interim Trade - STO 1 Jun09 50.00 Call @ 4.99 - Expired
03-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.45 -
24-Jun-09 - Interim Trade - STO 1 Jul09 50.00 Call @ 0.65 -

TLT - Adjustment

The following adjustment was made today on iShares Trust Barclays 20 Year Treasury Bond Fund (TLT):

24-Jun-09 - Interim Trade - STO 3 Jul09 96.00 Call @ 0.64 -

Current Position Summary:

Stock Investment: $33,620.95
Income Generated: $2,522.46
Percent Income Generated: 7.50%
Annualized Income Generated: 13.23%
Net Profit If Called: -$2,298.49
Percent Return If Called: -6.84%
Annualized Return If Called: -12.05%
Days Held to Expiration: 207 days

Trade History:

22-Dec-08 - First Stock Position - BTO 100 TLT @ 121.03 -
22-Dec-08 - Initial Call Option - STO 1 Jan09 121.00 Call @ 3.39 - Expired
02-Jan-09 - Dividend Received - DIV 100 Dividend @ 0.41 -
20-Jan-09 - Interim Trade - STO 1 Feb09 113.00 Call @ 1.39 - Expired
24-Feb-09 - Interim Trade - STO 2 Mar09 110.00 Call @ 1.09 - Expired
22-Jan-09 - Second Stock Position - BTO 100 TLT @ 108.96 -
22-Jan-09 - Combined Cost Basis - $22,998.95 200 @ 114.99 -
22-Jan-09 - Initial Call Option - STO 1 Feb09 109.00 Call @ 2.84 - Expired
06-Feb-09 - Dividend Received - DIV 200 Dividend @ 0.29 -
24-Feb-09 - Third Stock Position - BTO 100 TLT @ 106.22 -
24-Feb-09 - Combined Cost Basis - $33,620.95 300 @ 112.07 -
24-Feb-09 - Initial Call Option - STO 1 Mar09 106.00 Call @ 2.59 -
06-Mar-09 - Dividend Received - DIV 300 Dividend @ 0.28 -
24-Mar-09 - Interim Trade - STO 3 Apr09 105.00 Call @ 0.79 - Expired
07-Apr-09 - Dividend Received - DIV 300 Dividend @ 0.30 -
07-May-09 - Dividend Received - DIV 300 Dividend @ 0.30 -
15-May-09 - Interim Trade - STO 3 Jun09 100.00 Call @ 1.09 - Closed
05-Jun-09 - Buy Back and Roll Down - BTC 3 Jun09 100.00 Call @ -0.06 -
05-Jun-09 - Interim Trade - STO 3 Jun09 94.00 Call @ 0.29 -
05-Jun-09 - Interim Trade - STO 3 Jun09 94.00 Call @ 0.29 - Expired
05-Jun-09 - Dividend Received - DIV 300 Dividend @ 0.31 -
24-Jun-09 - Interim Trade - STO 3 Jul09 96.00 Call @ 0.64 -

SNDK - Adjustment

The following adjustment was made today on Sandisk (SNDK):

24-Jun-09 - Interim Trade - STO 2 Jul09 16.00 call @ 0.32 -

Current Position Summary:

Stock Investment: $10,854.00
Income Generated: $4,252.70
Percent Income Generated: 39.18
Annualized Income Generated: 12.12%
Net Profit If Called: -$3,401.30
Percent Return If Called: -31.34%
Annualized Return If Called: -9.69%
Days Held to Expiration: 1180 days

Trade History:

24-Apr-06 - Initial Stock Position - BTO 100 SNDK @ 59.56 -
24-Apr-06 - Initial Call Option - STO 1 Jul06 57.50 Call @ 7.09 - Closed
06-Jul-06 - Buy Back & Roll Out/Down - BTC 1 Jul06 57.50 Call @ -0.16 -
06-Jul-06 - Second Stock Position - BTO 100 SNDK @ 48.98 -
06-Jul-06 - Combined Cost Basis - $10,854.00 200 @ 54.27 -
06-Jul-06 - Continued Trade - STO 2 Oct06 55.00 Call @ 3.39 - Expired
23-Oct-06 - Continued Trade - STO 2 Jan07 55.00 Call @ 2.14 - Closed
19-Dec-06 - Buy Back & Roll Out/Down - BTC 2 Jan07 55.00 Call @ -0.16 -
19-Dec-06 - Continued Trade - STO 2 Feb07 50.00 Call @ 1.69 - Closed
06-Feb-07 - Buy Back & Roll Out/Down - BTC 2 Feb07 50.00 Call @ -0.06 -
06-Feb-07 - Interim Trade - STO 2 Apr07 45.00 Call @ 1.39 - Expired
27-Apr-07 - Interim Trade - STO 2 May07 45.00 Call @ 0.84 - Expired
21-May-07 - Interim Trade - STO 2 Jun07 45.00 Call @ 0.98 - Closed
15-Jun-07 - Buy Back & Roll Out/Up - BTC 2 Jun07 45.00 Call @ -1.46 -
15-Jun-07 - Continued Trade - STO 2 Oct07 50.00 Call @ 2.60 - Expired
22-Oct-07 - Continued Trade - STO 2 Nov07 45.00 Call @ 1.64 - Expired
20-Nov-07 - Continued Trade - STO 2 Dec07 40.00 Call @ 0.67 - Expired
14-Jan-08 - Interim Trade - STO 2 Feb08 35.00 Call @ 0.85 - Expired
21-Feb-08 - Interim Trade - STO 2 Mar08 30.00 Call @ 0.24 - Expired
25-Mar-08 - Interim Trade - STO 2 May08 25.00 Call @ 0.74 - Expired
29-Apr-08 - Buy Back & Roll Out/Up - BTC 2 May08 25.00 Call @ -2.35 -
29-Apr-08 - Interim Trade - STO 2 Jul08 30.00 Call @ 1.38 - Expired
24-Jul-08 - Interim Trade - STO 1 Oct08 20.00 Call @ 0.31 - Expired
24-Jul-08 - Interim Trade - STO 1 Oct08 17.50 Call @ 0.65 - Expired
20-Oct-08 - Interim Trade - STO 2 Nov08 18.00 Call @ 1.16 - Expired
24-Nov-08 - Interim Trade - STO 2 Dec08 8.00 Call @ 0.27 - Closed
12-Nov-08 - Buy Back and Roll Out/Up - BTC 2 Dec08 8.00 Call @ -2.01 -
11-Dec-08 - Interim Trade - STO 2 Jan09 11.00 Call @ 1.13 - Closed
16-Jan-09 - Buy Back - BTC 2 Jan09 11.00 Call @ -1.05 -
22-Jan-09 - Interim Trade - STO 2 Feb09 13.00 Call @ 0.81 - Expired
24-Feb-09 - Interim Trade - STO 2 Mar09 11.00 Call @ 0.22 - Expired
24-Mar-09 - Interim Trade - STO 2 Apr09 14.00 Call @ 0.67 - Closed
17-Apr-09 - Buy Back and Roll Out - BTC 2 Apr09 14.00 Call @ -1.05 -
17-Apr-09 - Interim Trade - STO 2 May08 15.00 Call @ 1.53 - Closed
04-May-09 - Buy Back and Roll Out - BTC 2 May08 15.00 Call @ -1.50 -
04-May-09 - Interim Trade - STO 2 Jun09 15.00 call @ 2.25 - Expired
24-Jun-09 - Interim Trade - STO 2 Jul09 16.00 call @ 0.32 -

LLY - Adjustment

The following adjustment was made today on Eli Lilly (LLY):

24-Jun-09 - Interim Trade - STO 1 Jul09 35.00 Call @ 0.29 -

Current Position Summary:

Stock Investment: $5,003.00
Income Generated: $879.30
Percent Income Generated: 17.58%
Annualized Income Generated: 14.55%
Net Profit If Called: -$623.70
Percent Return If Called: -12.47%
Annualized Return If Called: -10.32%
Days Held to Expiration: 441 days

Trade History:

02-May-08 - Initial Stock Position - BTO 100 LLY @ 49.71 - Called
02-May-08 - Initial Call Option - STO 1 Jun08 50.00 Call @ 1.29 - Expired
10-Jun-08 - Dividend Received - DIV 100 Dividend @ 0.47 -
07-Jul-08 - Continued Trade - STO 1 Aug08 50.00 Call @ 0.29 - Expired
22-Aug-08 - Continued Trade - STO 1 Sep08 50.00 Call @ 0.32 - Expired
10-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.47 -
23-Sep-08 - Continued Trade - STO 1 Oct08 50.00 Call @ 0.40 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 40.00 Call @ 0.19 - Expired
24-Nov-08 - Interim Trade - STO 1 Jan09 40.00 Call @ 0.39 - Expired
10-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.47 -
29-Jan-09 - Interim Trade - STO 1 Mar09 40.00 Call @ 0.90 - Expired
10-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.49 -
24-Mar-09 - Interim Trade - STO 1 Apr09 35.00 Call @ 0.74 - Expired
21-Apr-09 - Interim Trade - STO 1 May09 35.00 Call @ 0.49 - Exercised
13-May-09 - Option Exercised - EX 1 May09 35.00 Call @ 35.00 -
13-May-09 - Repurchase Stock Position - BTO 100 LLY @ 35.32 -
13-May-09 - Interim Trade - STO 1 Jun09 35.00 Call @ 1.59 - Expired
24-Jun-09 - Interim Trade - STO 1 Jul09 35.00 Call @ 0.29 -

FTEK - Adjustment

The following adjustment was made today on Fuel Tech (FTEK):

24-Jun-09 - Interim Trade - STO 1 Dec09 12.50 Call @ 0.69 -

Current Position Summary:

Stock Investment: $2,839.00
Income Generated: $528.00
Percent Income Generated: 18.60%
Annualized Income Generated: 7.44%
Net Profit If Called: -$1,061.00
Percent Return If Called: -37.37%
Annualized Return If Called: -14.94%
Days Held to Expiration: 913 days

Trade History:

19-Jun-07 - Initial Stock Position - BTO 100 FTEK @ 28.39 -
19-Jun-07 - Initial Call Option - STO 1 Dec07 30.00 Call @ 3.29 - Expired
07-Jan-08 - Continued Trade - STO 1 Feb08 25.00 Call @ 0.34 - Expired
21-Feb-08 - Interim Trade - STO 1 Mar08 22.50 Call @ 0.44 - Expired
25-Mar-08 - Interim Trade - STO 1 May08 22.50 Call @ 0.74 - Closed
29-Apr-08 - Buy Back & Roll Out/Up - BTC 1 May08 22.50 Call @ -3.91 -
29-Apr-08 - Continued Trade - STO 1 Jun08 30.00 Call @ 0.69 - Expired
07-Jul-08 - Interim Trade - STO 1 Aug08 22.50 Call @ 0.39 - Expired
22-Aug-08 - Interim Trade - STO 1 Sep08 22.50 Call @ 0.64 - Closed
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 22.50 Call @ -0.16 -
12-Sep-08 - Interim Trade - STO 1 Oct08 22.50 Call @ 0.24 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 17.50 Call @ 0.49 - Expired
24-Nov-08 - Interim Trade - STO 1 Jan09 12.50 Call @ 0.24 - Expired
20-Jan-09 - Interim Trade - STO 1 Mar09 12.50 Call @ 0.29 - Expired
24-Mar-09 - Interim Trade - STO 1 May09 12.50 Call @ 0.49 - Closed
04-May-09 - Buy Back and Roll Out - BTC 1 May09 12.50 Call @ -1.31 -
04-May-09 - Interim Trade - STO 1 Jun09 12.50 Call @ 1.69 - Expired
24-Jun-09 - Interim Trade - STO 1 Dec09 12.50 Call @ 0.69 -

DHI - Adjustment

The following adjustment was made today on DR Horton (DHI):

24-Jun-09 - Interim Trade - STO 3 Aug09 11.00 Call @ 0.29 -

Current Position Summary:

Stock Investment: $8,777.00
Income Generated: $2,891.80
Percent Income Generated: 32.95%
Annualized Income Generated: 8.12%
Net Profit If Called: -$2,585.20
Percent Return If Called: -29.45%
Annualized Return If Called: -7.26%
Days Held to Expiration: 1481 days

Trade History:

01-Aug-05 - Initial Stock Position - BTO 100 DHI @ 40.18 -
01-Aug-05 - Initial Call Option - STO 1 Aug05 40.00 Call @ 1.29 - Expired
19-Aug-05 - Dividend Received - DIV 100 Dividend @ 0.09 -
22-Aug-05 - Continued Trade - STO 1 Oct05 40.00 Call @ 0.54 - Closed
05-Oct-05 - Buy Back & Roll Out/Down - BTC 1 Oct05 40.00 Call @ -0.11 -
24-Oct-05 - Interim Trade - STO 1 Nov05 35.00 Call @ 0.49 - Closed
31-Oct-05 - Dividend Received - DIV 100 Dividend @ 0.09 -
18-Nov-05 - Buy Back & Roll Out/Up - BTC 1 Nov05 35.00 Call @ -0.31 -
21-Nov-05 - Continued Trade - STO 1 Dec05 40.00 Call @ 0.34 - Expired
09-Jan-06 - Continued Trade - STO 1 Jan06 40.00 Call @ 0.49 - Expired
23-Jan-06 - Continued Trade - STO 1 Feb06 40.00 Call @ 0.69 - Expired
10-Feb-06 - Dividend Received - DIV 100 Dividend @ 0.10 -
21-Feb-06 - Continued Trade - STO 1 Apr06 40.00 Call @ 0.44 - Closed
23-Mar-06 - Buy Back & Roll Out - BTC 1 Apr06 40.00 Call @ -0.11 -
23-Mar-06 - Continued Trade - STO 1 Aug06 40.00 Call @ 0.94 -
19-May-06 - Dividend Received - DIV 100 Dividend @ 0.10 -
23-May-06 - Buy Back & Roll Out/Down - BTC 1 Aug06 40.00 Call @ -0.11 - Closed
23-May-06 - Second Stock Position - BTO 100 DHI @ 26.89 -
23-May-08 - Combined Cost Basis - $6,707.00 200 @ 33.54 -
23-May-06 - Continued Trade - STO 2 Jan07 35.00 Call @ 1.04 -
25-Jul-06 - Buy Back & Roll Down - BTC 2 Jan07 35.00 Call @ -0.16 - Closed
25-Jul-06 - Third Stock Position - BTO 100 DHI @ 20.70 -
25-Jul-06 - Combined Cost Basis - $8,777.00 300 @ 29.26 -
25-Jul-06 - Interim Trade - STO 3 Jan07 25.00 Call @ 0.99 - Closed
01-Nov-06 - Dividend Received - DIV 300 Dividend @ 0.15 -
19-Dec-06 - Buy Back & Roll Up - BTC 3 Jan07 25.00 Call @ -2.36 -
19-Dec-06 - Continued Trade - STO 3 Jan08 30.00 Call @ 2.74 - Expired
09-Feb-07 - Dividend Received - DIV 300 Dividend @ 0.15 -
18-May-07 - Dividend Received - DIV 300 Dividend @ 0.15 -
27-Aug-07 - Dividend Received - DIV 300 Dividend @ 0.15 -
16-Nov-07 - Dividend Received - DIV 300 Dividend @ 0.15 -
24-Jan-08 - Interim Trade - STO 3 Feb08 15.00 Call @ 0.69 - Closed
20-Feb-08 - Dividend Received - DIV 300 Dividend @ 0.15 -
21-Feb-08 - Interim Trade - STO 3 Mar08 17.50 Call @ 0.39 - Expired
25-Mar-08 - Interim Trade - STO 3 May08 20.00 Call @ 0.39 - Expired
22-May-08 - Interim Trade - STO 3 Jul08 17.50 Call @ 0.16 - Expired
29-May-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
22-Jul-08 - Interim Trade - STO 1 Aug08 12.50 Call @ 0.43 - Closed
22-Jul-08 - Interim Trade - STO 1 Sep08 15.00 Call @ 0.27 - Closed
22-Jul-08 - Interim Trade - STO 1 Nov08 17.50 Call @ 0.33 - Closed
15-Aug-08 - Buy Back and Roll Out - BTC 1 Aug08 12.50 Call @ -0.04 -
15-Aug-08 - Interim Trade - STO 1 Sep08 12.50 Call @ 0.77 - Closed
28-Aug-08 - Dividend Received - DIV 300 Dividend @ 0.08 -
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 15.00 Call @ -0.36 -
12-Sep-08 - Buy Back & Roll Out/Up - BTC 1 Sep08 12.50 Call @ -1.86 -
12-Sep-08 - Interim Trade - STO 1 Oct08 15.00 Call @ 0.84 - Expired
12-Sep-08 - Interim Trade - STO 1 Nov08 15.00 Call @ 1.39 - Closed
20-Oct-08 - Buy Back and Roll Down - BTC 1 Nov08 17.50 Call @ -0.06 -
20-Oct-08 - Buy Back and Roll Down - BTC 1 Nov08 15.00 Call @ -0.06 -
20-Oct-08 - Interim Trade - STO 3 Dec08 10.00 Call @ 0.24 - Expired
18-Dec-08 - Dividend Received - DIV 300 Dividend @ 0.04 -
22-Dec-08 - Interim Trade - STO 3 Feb09 10.00 Call @ 0.44 - Expired
24-Feb-09 - Interim Trade - STO 3 Mar09 10.00 Call @ 0.34 - Expired
26-Feb-09 - Dividend Received - DIV 300 Dividend @ 0.04 -
24-Mar-09 - Interim Trade - STO 3 May09 12.50 Call @ 0.51 - Closed
04-May-09 - Buy Back and Roll Out - BTC 3 May09 12.50 Call @ -1.46 -
04-May-09 - Interim Trade - STO 3 Jun09 12.00 call @ 2.29 - Expired
27-May-09 - Dividend Received - DIV 300 Dividend @ 0.04 -
24-Jun-09 - Interim Trade - STO 3 Aug09 11.00 Call @ 0.29 -

BBT - Adjustment

The following adjustment was made today on BB&T (BBT):

24-Jun-09 - Interim Trade - STO 2 Jul09 24.00 Call @ 0.29 -

Current Position Summary:

Stock Investment: $6.671.00
Income Generated: $1,640.20
Percent Income Generated: 24.59%
Annualized Income Generated: 18.74%
Net Profit If Called: -$230.80
Percent Return If Called: -3.46%
Annualized Return If Called: -2.64%
Days Held to Expiration: 479 days

Trade History:

25-Mar-08 - Initial Stock Position - BTO 100 BBT @ 35.26 -
25-Mar-08 - Initial Call Option - STO 1 Apr08 35.00 Call @ 1.68 - Expired
23-Apr-08 - Continued Trade - STO 1 May08 35.00 Call @ 0.67 - Expired
01-May-08 - Dividend Received - DIV 100 Dividend @ 0.46 -
19-May-08 - Continued Trade - STO 1 Jun08 35.00 Call @ 1.47 - Expired
07-Jul-08 - Interim Trade - STO 1 Aug08 27.50 Call @ 0.35 - Closed
01-Aug-08 - Dividend Received - DIV 100 Dividend @ 0.47 -
11-Aug-08 - Buy Back and Roll Out/Up - BTC 1 Aug08 27.50 Call @ -4.02 -
11-Aug-08 - Dollar Cost Averaging - BTO 100 BBT @ 31.45 -
11-Aug-08 - Combined Cost Basis - $6,671.00 200 @ 33.36 -
11-Aug-08 - Continued Trade - STO 2 Dec08 32.50 Call @ 3.49 - Expired
03-Nov-08 - Dividend Received - DIV 200 Dividend @ 0.47 -
22-Dec-08 - Continued Trade - STO 2 Jan09 32.50 Call @ 0.19 - Expired
22-Jan-09 - Interim Trade - STO 2 Feb09 25.00 Call @ 0.54 - Expired
02-Feb-09 - Dividend Received - DIV 200 Dividend @ 0.47 -
24-Feb-09 - Interim Trade - STO 2 Mar09 20.00 Call @ 0.34 - Expired
24-Mar-09 - Interim Trade - STO 2 Apr09 22.50 Call @ 0.29 - Closed
17-Apr-09 - Buy Back and Roll Out - BTC 2 Apr09 22.50 Call @ -1.31 -
17-Apr-09 - Interim Trade - STO 2 Jun09 25.00 Call @ 2.40 - Expired
01-May-09 - Dividend Received - DIV 200 Dividend @ 0.47 -
24-Jun-09 - Interim Trade - STO 2 Jul09 24.00 Call @ 0.29 -

Paper Trade - TGT CC and CSP Closed

Since I'm now incorporating cash secured puts in my trading plan, and have real trade examples, there's no need to continue this paper trade, so I decided to close out it out on Friday. As you can see the results were virtually the same, and includes the dividend received on the CC position.

TGT CC Position

Stock Investment: $3,978.00
Income Generated: $332.00
Net Profit: $311.00
Percent Return: 7.82%
Annualized Return: 40.19%
Duration of Trade: 71 days

Trade History:

09-Apr-09 - Initial Stock Position - BTO 100 TGT @ 39.78 - Closed
09-Apr-09 - Initial Call Option - STO 1 May09 37.50 Call @ 3.70 - Closed
15-May-09 - Buy Back and Roll Out/Up - BTC 1 May09 37.50 Call @ -2.97 -
15-May-09 - Continued Trade - STO 1 Jun09 39.00 Call @ 3.04 - Closed
10-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.16 -
19-Jun-09 - Close Option Position - BTC 1 Jun09 39.00 Call @ -0.64 -
19-Jun-09 - Close Stock Position - STC 1 Closed @ 39.57 -


TGT CSP Position

Stock Investment: $3,900.00
Income Generated: $312.00
Net Profit: $312.00
Percent Return: 8.00%
Annualized Return: 41.13%
Duration of Trade: 71 days

Trade History:

09-Apr-09 - Initial Put Option - STO 1 May09 37.50 Put @ 1.44 - Expired
15-May-09 - Buy Back and Roll Out/Up - BTC 1 May09 37.50 Put @ -0.06 -
15-May-09 - Cash to Secure Put - CSP 100 TGT @ 39.00 -
15-May-09 - Continued Trade - STO 1 Jun09 39.00 Put @ 1.80 - Closed
19-Jun-09 - Close Option Position - BTC 1 Jun09 39.00 Put @ -0.06 -
19-Jun-09 - Close Secured Cash - CSP 1 Closed @ 39.00 -

PFE - Adjustment

The following adjustment was made Friday on Pfizer (PFE):

19-Jun-09 - Buy Back and Roll Out - BTC 2 Jun09 15.00 Call @ -0.06 -
19-Jun-09 - Interim Trade - STO 2 Jul 15.00 Call @ 0.53 -

The PFE Jun09 15.00 was ITM so I rolled it out to a Jul09 15.00 call to avoid assignment.

Current Position Summary:

Stock Investment: $4,565.00
Income Generated: $741.00
Percent Income Generated: 16.23%
Annualized Income Generated: 11.57%
Net Profit If Called: -$824.00
Percent Return If Called: -18.05%
Annualized Return If Called: -12.87%
Days Held to Expiration: 512 days

Trade History:

24-Jan-08 - Initial Stock Position - BTO 200 PFE @ 22.83 -
24-Jan-08 - Initial Call Option - STO 2 Mar08 22.50 Call @ 0.96 - Expired
04-Mar-08 - Dividend Received - DIV 200 Dividend @ 0.32 -
25-Mar-08 - Continued Trade - STO 2 Jun08 22.50 Call @ 0.24 - Expired
03-Jun-08 - Dividend Received - DIV 200 Dividend @ 0.32 -
24-Jul-08 - Continued Trade - STO 1 Dec08 22.50 Call @ 0.22 -
24-Jul-08 - Continued Trade - STO 1 Dec08 22.50 Call @ 0.22 - Expired
29-Jul-08 - Continued Trade - STO 1 Dec08 22.50 Call @ 0.14 - Expired
03-Sep-08 - Dividend Received - DIV 200 Dividend @ 0.32 -
02-Dec-08 - Dividend Received - DIV 200 Dividend @ 0.32 -
22-Dec-08 - Interim Trade - STO 2 Mar09 20.00 Call @ 0.31 - Expired
03-Mar-09 - Dividend Received - DIV 200 Dividend @ 0.32 -
24-Mar-09 - Interim Trade - STO 2 Apr09 15.00 Call @ 0.20 - Expired
21-Apr-09 - Interim Trade - STO 2 Jun09 15.00 Call @ 0.20 - Closed
02-Jun-09 - Dividend Received - DIV 200 Dividend @ 0.16 -
19-Jun-09 - Buy Back and Roll Out - BTC 2 Jun09 15.00 Call @ -0.06 -
19-Jun-09 - Interim Trade - STO 2 Jul 15.00 Call @ 0.53 -

PFCB - Adjustment

The following adjustment was made Friday on P.F Chang's (PFCB):

19-Jun-09 - Option Exercised - EX 1 Jun09 25.00 Call @ 25.00 -
19-Jun-09 - Cash to Secure Put - CSP 100 PFCB @ 25.00 -
19-Jun-09 - Initial Put Position - STO 1 Oct 25.00 Put @ 1.34 -

The Jun09 25.00 call was deep ITM and was going to be exercised after the market closed, since this was expiration Friday. In order to roll out the calls for a net credit, I would have had to average down another 100 shares, which meant an additional $3,186 investment. I didn't want to increase my investment in PFCB by that much so I decided to try a new strategy. I would allow the call to be exercised and then re-enter the 100 share position by selling 1 cash secured put, in lieu of averaging down. So, in anticipation of having both Jun09 25.00 call exercised and receiving $2,500 from the sale of 100 shares, I sold 1 Jul09 25.00 put, secured by $2,500 in cash. This resulted in no additional investment since the $2,500 to secure the put was offset by the $2,500 from the proceeds of the sale. If the Jul09 put is assigned I'll own 100 shares of PFCB again and will continue to sell a call. If not assigned, I'll continue selling a put.

Current Position Summary:

Stock Investment: $3,578.00
Income Generated: $901.30
Percent Income Generated: 25.19%
Annualized Income Generated: 11.67%
Net Profit If Expired: -$176.70
Percent Return If Expired: -4.94%
Annualized Return If Expired: -2.29%
Days Held to Expiration: 788 days

Trade History:

20-Aug-07 - Initial Stock Position - BTO 100 PFCB @ 35.78 - Called
20-Aug-07 - Initial Call Option - STO 1 Sep07 35.00 Call @ 2.30 - Expired
24-Sep-07 - Continued Trade - STO 1 Oct07 35.00 Call @ 0.39 - Expired
25-Oct-07 - Continued Trade - STO 1 Jan08 35.00 Call @ 0.22 - Expired
24-Jan-08 - Interim Trade - STO 1 Feb08 30.00 Call @ 0.65 - Expired
21-Feb-08 - Interim Trade - STO 1 Mar08 30.00 Call @ 0.74 - Expired
25-Mar-08 - Continued Trade - STO 1 Apr08 35.00 Call @ 0.34 - Expired
24-Apr-08 - Continued Trade - STO 1 Jun08 35.00 Call @ 0.49 - Expired
24-Jul-08 - Interim Trade - STO 1 Sep08 30.00 Call @ 0.63 - Closed
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 30.00 Call @ -0.06 -
12-Sep-08 - Interim Trade - STO 1 Oct08 30.00 Call @ 0.09 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 22.50 Call @ 0.34 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 20.00 Call @ 0.34 - Closed
10-Dec-08 - Buy Back and Roll Out/Up - BTC 1 Dec08 20.00 Call @ -3.11 -
10-Dec-08 - Interim Trade - STO 1 Apr09 25.00 Call @ 2.89 - Closed
14-Apr-09 - Buy Back and Roll Out - BTC 1 Apr09 25.00 Call @ -2.55 -
14-Apr-09 - Interim Trade - STO 1 May09 25.00 Call @ 3.49 - Closed
04-May-09 - Buy Back and Roll Out - BTC 1 May09 25.00 Call @ -6.89 -
04-May-09 - Interim Trade - STO 1 Jun09 25.00 Call @ 7.37 - Exercised
19-Jun-09 - Option Exercised - EX 1 Jun09 25.00 Call @ 25.00 -
19-Jun-09 - Cash to Secure Put - CSP 100 PFCB @ 25.00 -
19-Jun-09 - Initial Put Position - STO 1 Oct 25.00 Put @ 1.34 -

BHP - Adjustment

The following adjustment was made Friday on BHP Billiton (BHP):

19-Jun-09 - Option Exercised - EX 2 Jun09 45.00 Call @ 45.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 BHP @ 47.50 -
19-Jun-09 - Combined Cost Basis - $13,254.00 200 @ 66.27 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 47.50 Put @ 0.48 -

The Jun09 45.00 call was deep ITM and was going to be exercised after the market closed, since this was expiration Friday. In order to roll out the calls for a net credit, I would have had to average down another 100 or 200 shares, which meant an additional $5,624 or $10,248 investment. I didn't want to increase my investment in BHP by that much so I decided to try a new strategy. I would allow both calls to be exercised and then re-enter the 200 share position by selling 2 cash secured puts, in lieu of averaging down. So, in anticipation of having both Jun09 45.00 calls exercised and receiving $9,000 from the sale of 200 shares, I sold 2 Jul09 47.50 puts, secured by $9,500 in cash. This resulted in an additional investment of only $500, which was significantly less than the cost of averaging down and increased my cost basis from $12,754 to $13,254. If the Jul09 puts are assigned I'll own 200 shares of BHP again and will continue to sell calls. If not assigned, I'll continue selling puts.

Current Position Summary:

Stock Investment: $13,254.00
Income Generated: $2,630.20
Percent Income Generated: 19.84%
Annualized Income Generated: 21.75%
Net Profit If Called: -$1,123.80
Percent Return If Called: -8.48%
Annualized Return If Called: -9.29%
Days Held to Expiration: 333 days

Trade History:

18-Aug-08 - Initial Stock Position - BTO 100 BHP @ 65.11 -
18-Aug-08 - Initial Call Option - STO 1 Sep08 65.00 Call @ 3.00 - Expired
22-Sep-08 - Continued Trade - STO 1 Oct08 65.00 Call @ 3.30 - Expired
23-Sep-08 - Second Stock Position - BTO 100 BHP @ 62.43 -
23-Sep-08 - Combined Cost Basis - $12,754.00 200 @ 63.77 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 60.00 Call @ 5.10 - Expired
25-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.82 -
20-Oct-08 - Interim Trade - STO 2 Nov08 45.00 Call @ 1.19 - Expired
24-Nov-08 - Interim Trade - STO 2 Dec08 37.50 Call @ 1.57 - Closed
15-Dec-08 - Buy Back and Roll Out/Up - BTC 2 Dec08 37.50 Call @ -4.41 -
15-Dec-08 - Interim Trade - STO 2 May09 45.00 Call @ 6.39 - Closed
17-Mar-09 - Dividend Received - DIV 200 Dividend @ 0.82 -
04-May-09 - Buy Back and Roll Out - BTC 2 May09 45.00 Call @ -7.01 -
04-May-09 - Interim Trade - STO 2 Jun09 45.00 Call @ 7.99 - Exercised
19-Jun-09 - Option Exercised - EX 2 Jun09 45.00 Call @ 45.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 BHP @ 47.50 -
19-Jun-09 - Combined Cost Basis - $13,254.00 200 @ 66.27 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 47.50 Put @ 0.48 -

AXP - Adjustment

The following adjustment was made Friday on American Express (AXP):

19-Jun-09 - Option Exercised - EX 2 Jun09 17.00 Call @ 17.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 AXP @ 21.00 -
19-Jun-09 - Combined Cost Basis - $10,200.00 200 @ 51.00 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 21.00 Put @ 0.29 -

The Jun09 17.00 call was deep ITM and was going to be exercised after the market closed, since this was expiration Friday. In order to roll out the calls for a net credit, I would have had to average down another 100 or 200 shares, which meant an additional $2,480 or $4,960 investment. I didn't want to increase my investment in AXP by that much so I decided to try a new strategy. I would allow both calls to be exercised and then re-enter the 200 share position by selling 2 cash secured puts, in lieu of averaging down. So, in anticipation of having both Jun09 17.00 calls exercised and receiving $3,400 from the sale of 200 shares, I sold 2 Jul09 21.00 puts, secured by $4,200 in cash. This resulted in an additional investment of only $800, which was significantly less than the cost of averaging down and increased my cost basis from $9,400 to $10,200. If the Jul09 puts are assigned I'll own 200 shares of AXP again and will continue to sell calls. If not assigned, I'll continue selling puts.

Current Position Summary:

Stock Investment: $10,200.00
Income Generated: $2,414.60
Percent Income Generated: 23.67%
Annualized Income Generated: 14.47%
Net Profit If Called: -$3,585.40
Percent Return If Called: -35.15%
Annualized Return If Called: -21.49%
Days Held to Expiration: 597 days

Trade History:

28-Nov-07 - Initial Stock Position - BTO 100 AXP @ 56.74 - Called
28-Nov-07 - Initial Call Option - STO 1 Dec07 55.00 Call @ 3.21 - Expired
07-Jan-08 - Continued Trade - STO 1 Feb08 55.00 Call @ 0.69 - Expired
08-Feb-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
21-Feb-08 - Interim Trade - STO 1 Apr08 50.00 Call @ 0.89 - Expired
25-Apr-08 - Interim Trade - STO 1 May08 50.00 Call @ 0.30 - Expired
09-May-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
19-May-08 - Interim Trade - STO 1 Jul08 50.00 Call @ 2.65 - Expired
23-Jul-08 - Interim Trade - STO 1 Aug08 42.50 Call @ 0.60 - Expired
08-Aug-08 - Dividend Received - DIV 100 Dividend @ 0.18 -
22-Aug-08 - Interim Trade - STO 1 Sep08 42.50 Call @ 0.28 - Closed
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 42.50 Call @ -0.16 -
12-Sep-08 - Interim Trade - STO 1 Oct08 42.50 Call @ 0.79 - Expired
23-Sep-08 - Second Stock Position - BTO 100 AXP @ 37.26 - Called
23-Sep-08 - Combined Cost Basis - $9,400.00 200 @ 47.00 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 35.00 Call @ 3.67 - Expired
20-Oct-08 - Interim Trade - STO 2 Nov08 27.50 Call @ 1.22 - Expired
10-Nov-08 - Dividend Received - DIV 200 Dividend @ 0.18 -
24-Nov-08 - Interim Trade - STO 2 Dec08 25.00 Call @ 0.54 - Expired
22-Dec-08 - Interim Trade - STO 2 Jan09 22.50 Call @ 0.31 - Expired
27-Jan-09 - Interim Trade - STO 2 Feb09 17.50 Call @ 0.66 - Expired
10-Feb-09 - Dividend Received - DIV 200 Dividend @ 0.18 -
24-Feb-09 - Interim Trade - STO 2 Mar09 15.00 Call @ 0.34 - Expired
24-Mar-09 - Interim Trade - STO 2 May09 17.50 Call @ 0.84 - Closed
04-May-09 - Buy Back and Roll Out - BTC 2 May09 17.50 Call @ -8.90 -
04-May-09 - Interim Trade - STO 2 Jun09 17.00 Call @ 9.49 - Exercised
08-May-09 - Dividend Received - DIV 200 Dividend @ 0.18 -
19-Jun-09 - Option Exercised - EX 2 Jun09 17.00 Call @ 17.00 -
19-Jun-09 - Cash to Secure Put - CSP 200 AXP @ 21.00 -
19-Jun-09 - Combined Cost Basis - $10,200.00 200 @ 51.00 -
19-Jun-09 - Initial Put Position - STO 2 Jul09 21.00 Put @ 0.29 -

UTX - Adjustment

The following adjustment was made today on United Technologies (UTX):

18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 45.00 Call @ -10.21 -
18-Jun-09 - Interim Trade - STO 1 Aug09 45.00 Call @ 10.39 -

The UTX Jun09 45.00 call was ITM so I rolled it out to a Aug09 45.00 call in order to avoid assignment. I received a net credit on the roll of $18.00.

Current Position Summary:

Stock Investment: $7,524.00
Income Generated: $1,148.10
Percent Income Generated: 15.26%
Annualized Income Generated: 11.70%
Net Profit If Called: -$1,875.90
Percent Return If Called: -24.93%
Annualized Return If Called: -19.12%
Days Held to Expiration: 476 days

Trade History:

02-May-08 - Initial Stock Position - BTO 100 UTX @ 75.24 -
02-May-08 - Initial Call Option - STO 1 Jun08 75.00 Call @ 2.37 - Expired
10-Jun-08 - Dividend Received - DIV 100 Dividend @ 0.32 -
07-Jul-08 - Interim Trade - STO 1 Aug08 70.00 Call @ 0.26 - Expired
22-Aug-08 - Interim Trade - STO 1 Sep08 70.00 Call @ 0.35 - Closed
10-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.32 -
12-Sep-08 - Buy Back & Roll Out - BTC 1 Sep08 70.00 Call @ -0.06 -
12-Sep-08 - Interim Trade - STO 1 Oct08 70.00 Call @ 0.69 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 60.00 Call @ 0.39 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 55.00 Call @ 0.79 - Expired
10-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.39 -
22-Dec-08 - Interim Trade - STO 1 Feb09 60.00 Call @ 0.60 - Closed
23-Jan-09 - Buy Back and Roll Down - BTC 1 Feb09 60.00 Call @ -0.06 -
23-Jan-09 - Interim Trade - STO 1 Feb09 50.00 Call @ 0.90 - Expired
24-Feb-09 - Interim Trade - STO 1 Mar09 45.00 Call @ 0.88 - Expired
10-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.39 -
24-Mar-09 - Interim Trade - STO 1 Apr09 45.00 Call @ 1.20 - Closed
16-Apr-09 - Buy Back and Roll Out - BTC 1 Apr09 45.00 Call @ -2.90 -
16-Apr-09 - Interim Trade - STO 1 May09 45.00 Call @ 3.89 - Closed
04-May-09 - Buy Back and Roll Out - BTC 1 May09 45.00 Call @ -6.20 -
04-May-09 - Interim Trade - STO 1 Jun09 45.00 Call @ 6.40 - Closed
10-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.39 -
18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 45.00 Call @ -10.21 -
18-Jun-09 - Interim Trade - STO 1 Aug09 45.00 Call @ 10.39 -

JNJ - Adjustment

The following adjustment was made today on Johnson & Johnson (JNJ):

18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 55.00 Call @ -0.86 -
18-Jun-09 - Continued Trade - STO 1 Jul09 55.00 Call @ 1.70 -

The JNJ Jun09 55.00 call was ITM so I rolled it out to a Jul09 55.00 call in order to avoid assignment. I received a net credit on the roll of $84.00.

Current Position Summary:

Stock Investment: $6,146.00
Income Generated: $1,119.20
Percent Income Generated: 18.21%
Annualized Income Generated: 25.96%
Net Profit If Called: $473.20
Percent Return If Called: 7.70%
Annualized Return If Called: 10.98%
Days Held to Expiration: 256 days

Trade History:

03-Nov-08 - Initial Stock Position - BTO 100 JNJ @ 61.46 -
03-Nov-08 - Initial Call Option - STO 1 Nov08 60.00 Call @ 2.95 - Expired
24-Nov-08 - Continued Trade - STO 1 Dec08 60.00 Call @ 1.90 - Expired
22-Dec-08 - Continued Trade - STO 1 Jan09 60.00 Call @ 1.45 - Expired
22-Jan-09 - Continued Trade - STO 1 Mar09 60.00 Call @ 0.95 - Expired
10-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.46 -
24-Mar-09 - Continued Trade - STO 1 Apr09 55.00 Call @ 0.80 - Expired
21-Apr-09 - Continued Trade - STO 1 May09 55.00 Call @ 0.30 - Closed
15-May-09 - Buy Back and Roll Out - BTC 1 May09 55.00 Call @ -0.11 -
15-May-09 - Continued Trade - STO 1 Jun09 55.00 Call @ 1.15 - Closed
09-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.49 -
18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 55.00 Call @ -0.86 -
18-Jun-09 - Continued Trade - STO 1 Jul09 55.00 Call @ 1.70 -

DOV - Adjustment

The following adjustment was made today on Dover Corp (DOV):

18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 30.00 Call @ -3.81 -
18-Jun-09 - Interim Trade - STO 1 Sep09 30.00 Call @ 4.89 -

The DOV Jun09 30.00 call was ITM so I rolled it out to a Sep09 30.00 call in order to avoid assignment. I received a net credit on the roll of $108.00.

Current Position Summary:

Stock Investment: $5,421.00
Income Generated: $716.00
Percent Income Generated: 13.21%
Annualized Income Generated: 9.90%
Net Profit If Called: -$1,705.00
Percent Return If Called: -31.45%
Annualized Return If Called: -23.57%
Days Held to Expiration: 487 days

Trade History:

19-May-08 - Initial Stock Position - BTO 100 DOV @ 54.21 -
19-May-08 - Initial Call Option - STO 1 Jun08 55.00 Call @ 1.15 - Expired
15-Jun-08 - Dividend Received - DIV 100 Dividend @ 0.20 -
07-Jul-08 - Continued Trade - STO 1 Sep08 55.00 Call @ 0.47 - Expired
15-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.25 -
23-Sep-08 - Interim Trade - STO 1 Dec08 50.00 Call @ 0.78 - Expired
15-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.25 -
22-Dec-08 - Interim Trade - STO 1 Jan09 35.00 Call @ 0.29 - Expired
28-Jan-09 - Interim Trade - STO 1 Mar09 35.00 Call @ 0.79 - Expired
15-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.25 -
24-Mar-09 - Interim Trade - STO 1 May09 30.00 Call @ 0.79 - Closed
04-May-09 - Buy Back and Roll Out - BTC 1 May09 30.00 Call @ -2.48 -
04-May-09 - Interim Trade - STO 1 Jun09 30.00 Call @ 3.09 - Closed
15-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.25 -
18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 30.00 Call @ -3.81 -
18-Jun-09 - Interim Trade - STO 1 Sep09 30.00 Call @ 4.89 -

BJS - Adjustment

The following adjustments were made today on BJ Services (BJS):

18-Jun-09 - Buy Back and Roll Out - BTC 2 Jun09 12.50 Call @ -1.66 -
18-Jun-09 - Interim Trade - STO 2 Jul09 12.50 Call @ 1.95 -

The BJS Jun09 12.50 call was ITM so I rolled it out to a Jul09 12.50 call in order to avoid assignment. I received a net credit on the roll of $29.00.

Current Position Summary:

Stock Investment: $11,238.00
Income Generated: $3,480.05
Percent Income Generated: 30.97%
Annualized Income Generated: 8.91%
Net Profit If Called: -$4,007.95
Percent Return If Called: -35.66%
Annualized Return If Called: -10.26%
Days Held to Expiration: 1269 days

Trade History:

25-Jan-06 - Initial Stock Position - BTO 200 BJS @ 40.05 -
25-Jan-06 - Initial Call Option - STO 2 Feb06 40.00 Call @ 1.54 - Expired
21-Feb-06 - Continued Trade - STO 2 Apr06 40.00 Call @ 0.49 - Closed
20-Mar-06 - Buy Back - BTC 2 Apr06 40.00 Call @ -0.11 -
20-Mar-06 - Second Stock Position - BTO 100 BJS @ 32.29 -
20-Mar-06 - Combined Cost Basis - $11,238.00 300 @ 37.46 -
20-Mar-06 - Continued Trade - STO 3 Jul05 37.50 Call @ 0.94 - Expired
14-Jul-06 - Dividend Received - DIV 300 Dividend @ 0.05 -
24-Jul-06 - Interim Trade - STO 3 Oct06 35.00 Call @ 1.19 -
13-Oct-06 - Dividend Received - DIV 300 Dividend @ 0.05 -
23-Oct-06 - Interim Trade - STO 3 Jan07 35.00 Call @ 0.79 -
22-Dec-06 - Buy Back & Roll Out - BTC 3 Jan07 35.00 Call @ -0.11 - Closed
22-Dec-06 - Continued Trade - STO 3 Jul07 35.00 Call @ 1.66 - Closed
12-Jan-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
13-Apr-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
21-Jun-07 - Buy Back & Roll Out/Down - BTC 3 Jul07 35.00 Call @ -0.11 - Closed
21-Jun-07 - Interim Trade - STO 3 Oct07 32.50 Call @ 0.79 - Expired
13-Jul-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
12-Oct-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
30-Oct-07 - Interim Trade - STO 3 Dec07 27.50 Call @ 0.55 - Expired
11-Jan-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
14-Jan-08 - Interim Trade - STO 3 Apr08 27.50 Call @ 0.64 - Closed
14-Apr-08 - Buy Back & Roll Out/Up - BTC 3 Apr08 27.50 Call @ -1.71 -
14-Apr-08 - Interim Trade - STO 3 Jul08 30.00 Call @ 1.84 - Expired
15-Apr-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
15-Jul-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
23-Jul-08 - Continued Trade - STO 2 Aug08 35.00 Call @ 0.42 - Expired
23-Jul-08 - Continued Trade - STO 1 Aug08 32.50 Call @ 1.14 - Expired
22-Aug-08 - Continued Trade - STO 2 Oct08 32.50 Call @ 0.31 - Expired
22-Aug-08 - Continued Trade - STO 1 Oct08 30.00 Call @ 0.78 - Expired
14-Oct-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
20-Oct-08 - Interim Trade - STO 3 Nov08 17.50 Call @ 0.29 - Expired
24-Nov-08 - Interim Trade - STO 3 Jan09 15.00 Call @ 0.24 - Expired
13-Jan-09 - Dividend Received - DIV 300 Dividend @ 0.05 -
22-Jan-09 - Interim Trade - STO 3 Mar09 12.50 Call @ 0.59 - Expired
24-Mar-09 - Interim Trade - STO 3 May09 12.50 Call @ 0.46 - Closed
15-Apr-09 - Dividend Received - DIV 300 Dividend @ 0.05 -
04-May-09 - Buy Back and Roll Out - BTC 3 May09 12.50 Call @ -2.71 -
04-May-09 - Interim Trade - STO 3 Jun09 12.50 Call @ 2.94 - Closed
11-Jun-09 - Option Exercised - EX 1 Jun09 12.50 Call @ 12.50 - Partial Exercise
12-Jun-09 - Cash to Secure Put - CSP 100 BJS @ 12.50 -
12-Jun-09 - Initial Put Position - STO 1 Jul09 12.50 Put @ 0.20 -
18-Jun-09 - Buy Back and Roll Out - BTC 2 Jun09 12.50 Call @ -1.66 -
18-Jun-09 - Interim Trade - STO 2 Jul09 12.50 Call @ 1.95 -

BAC - Adjustment

The following adjustment was made today on Bank of Americe (BAC):

18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 11.00 Call @ -1.88 -
18-Jun-09 - Interim Trade - STO 1 Jul09 11.00 Call @ 2.18 -

The BAC Jun09 11.00 call was ITM so I rolled it out to a Jul09 11.00 call in order to avoid assignment. I received a net credit on the roll of $30.00.

Current Position Summary:

Stock Investment: $3,372.00
Income Generated: $811.90
Percent Income Generated: 24.08%
Annualized Income Generated: 29.69%
Net Profit If Called: -$1,460.10
Percent Return If Called: -43.30%
Annualized Return If Called: -53.39%
Days Held to Expiration: 296 days

Trade History:

24-Sep-08 - Initial Stock Position - BTO 100 BAC @ 33.72 -
24-Sep-08 - Initial Call Option - STO 1 Oct08 32.50 Call @ 3.21 - Expired
26-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.64 -
20-Oct-08 - Interim Trade - STO 1 Nov08 27.50 Call @ 0.73 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 17.50Call @ 0.47 - Expired
22-Dec-08 - Interim Trade - STO 1 Jan09 16.00 Call @ 0.47 - Expired
26-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.32 -
22-Jan-09 - Interim Trade - STO 1 Mar09 9.00 Call @ 0.67 - Expired
24-Mar-09 - Interim Trade - STO 1 Apr09 9.00 Call @ 0.60 - Closed
27-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.01 -
14-Apr-09 - Buy Back and Roll Out/Up - BTC 1 Apr09 9.00 Call @ -1.76 -
14-Apr-09 - Interim Trade - STO 1 May09 10.00 Call @ 2.05 - Closed
15-May-09 - Buy Back and Roll Out/Up - BTC 1 May09 10.00 Call @ -0.73 -
15-May-09 - Interim Trade - STO 1 Jun09 11.00 Call @ 1.15 - Closed
18-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 11.00 Call @ -1.88 -
18-Jun-09 - Interim Trade - STO 1 Jul09 11.00 Call @ 2.18 -

GE - Adjustment

The following adjustment was made today on General Electric (GE):

16-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 11.00 Call @ -1.97 -
16-Jun-09 - Interim Trade - STO 1 Sep09 11.00 Call @ 2.46 -

Ex-dividend date for GE is 6/18 and they will pay a $0.10/share dividend on 7/27. The Jun09 11 call was ITM with about $0.01 time value remaining and was therefore in danger of an early exercise to capture the dividend. So, I rolled out to a Sep09 11 call for a net credit of $49.

Current Position Summary:

Stock Investment: $2,501.00
Income Generated: $477.00
Percent Income Generated: 19.07%
Annualized Income Generated: 19.34%
Net Profit If Called: -$924.00
Percent Return If Called: -36.95%
Annualized Return If Called: -37.46%
Days Held to Expiration: 360 days

Trade History:

23-Sep-08 - Initial Stock Position - BTO 100 GE @ 25.01 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 25.00 Call @ 1.79 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 22.00 Call @ 0.34 - Expired
22-Dec-08 - Interim Trade - STO 1 Feb09 18.00 Call @ 0.48 - Expired
26-Jan-09 - Dividend Received - DIV 100 Dividend @ 0.31 -
24-Feb-09 - Interim Trade - STO 1 Apr09 11.00 Call @ 0.51 - Closed
17-Apr-09 - Buy Back and Roll Out - BTC 1 Apr09 11.00 Call @ -1.58 -
17-Apr-09 - Interim Trade - STO 1 May09 11.00 Call @ 1.87 - Closed
27-Apr-09 - Dividend Received - DIV 100 Dividend @ 0.31 -
04-May-09 - Buy Back and Roll Out - BTC 1 May09 11.00 Call @ -2.15 -
04-May-09 - Interim Trade - STO 1 Jun09 11.00 Call @ 2.40 - Closed
16-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 11.00 Call @ -1.97 -
16-Jun-09 - Interim Trade - STO 1 Sep09 11.00 Call @ 2.46 -

BJS - Adjustment

The following adjustments were made today on BJ Services (BJS):

11-Jun-09 - Option Exercised - EX 1 Jun09 12.50 Call @ 12.50 - Partial Exercise
12-Jun-09 - Cash to Secure Put - CSP 100 BJS @ 12.50 -
12-Jun-09 - Initial Put Position - STO 1 Jul09 12.50 Put @ 0.20 -

Today is ex-dividend date for BJS with a $0.05 dividend payable on 7/15. Yesterday, the Jun 12.50 call had less than $0.05 time value and I was assigned on 100 shares of my 300 share position (i.e. 1 Jun 12.50 call option was exercised). BJS still has good fundamentals but it's trading at a 15% premium to fair value. Therefore, I didn't want to average down at this price, so I sold a Jul 12.50 cash secured put. I received $1,250 from the sale of the stock, and used that $1,250 to secure the put. Therefore, my initial cost basis hasn't changed. I also still have 200 shares with 2 Jun 12.50 calls that are ITM. If they get called I will sell 2 more Jul 12.50 cash secured puts.

This is my new strategy of using cash secured puts in lieu of averaging down and/or re-entering after assignment. From an accounting standpoint, the call and the put were a wash, $1,250 credit (call) and a $1,250 debit (put). Although the $1,250 is still in my account, it's tied up to secure the put, just as if I had purchased the stock at $12.50, so I include it in my cost basis.

Current Position Summary:

Stock Investment: $11,238.00
Income Generated: $3,420.85
Percent Income Generated: 30.44%
Annualized Income Generated: 8.95%
Net Profit If Called: -$4,067.15
Percent Return If Called: -36.19%
Annualized Return If Called: -10.64%
Days Held to Expiration: 1241 days

Trade History:

25-Jan-06 - Initial Stock Position - BTO 200 BJS @ 40.05 -
25-Jan-06 - Initial Call Option - STO 2 Feb06 40.00 Call @ 1.54 - Expired
21-Feb-06 - Continued Trade - STO 2 Apr06 40.00 Call @ 0.49 - Closed
20-Mar-06 - Buy Back - BTC 2 Apr06 40.00 Call @ -0.11 -
20-Mar-06 - Second Stock Position - BTO 100 BJS @ 32.29 -
20-Mar-06 - Combined Cost Basis - $11,238.00 300 @ 37.46 -
20-Mar-06 - Continued Trade - STO 3 Jul05 37.50 Call @ 0.94 - Expired
14-Jul-06 - Dividend Received - DIV 300 Dividend @ 0.05 -
24-Jul-06 - Interim Trade - STO 3 Oct06 35.00 Call @ 1.19 -
13-Oct-06 - Dividend Received - DIV 300 Dividend @ 0.05 -
23-Oct-06 - Interim Trade - STO 3 Jan07 35.00 Call @ 0.79 -
22-Dec-06 - Buy Back & Roll Out - BTC 3 Jan07 35.00 Call @ -0.11 - Closed
22-Dec-06 - Continued Trade - STO 3 Jul07 35.00 Call @ 1.66 - Closed
12-Jan-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
13-Apr-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
21-Jun-07 - Buy Back & Roll Out/Down - BTC 3 Jul07 35.00 Call @ -0.11 - Closed
21-Jun-07 - Interim Trade - STO 3 Oct07 32.50 Call @ 0.79 - Expired
13-Jul-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
12-Oct-07 - Dividend Received - DIV 300 Dividend @ 0.05 -
30-Oct-07 - Interim Trade - STO 3 Dec07 27.50 Call @ 0.55 - Expired
11-Jan-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
14-Jan-08 - Interim Trade - STO 3 Apr08 27.50 Call @ 0.64 - Closed
14-Apr-08 - Buy Back & Roll Out/Up - BTC 3 Apr08 27.50 Call @ -1.71 -
14-Apr-08 - Interim Trade - STO 3 Jul08 30.00 Call @ 1.84 - Expired
15-Apr-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
15-Jul-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
23-Jul-08 - Continued Trade - STO 2 Aug08 35.00 Call @ 0.42 - Expired
23-Jul-08 - Continued Trade - STO 1 Aug08 32.50 Call @ 1.14 - Expired
22-Aug-08 - Continued Trade - STO 2 Oct08 32.50 Call @ 0.31 - Expired
22-Aug-08 - Continued Trade - STO 1 Oct08 30.00 Call @ 0.78 - Expired
14-Oct-08 - Dividend Received - DIV 300 Dividend @ 0.05 -
20-Oct-08 - Interim Trade - STO 3 Nov08 17.50 Call @ 0.29 - Expired
24-Nov-08 - Interim Trade - STO 3 Jan09 15.00 Call @ 0.24 - Expired
13-Jan-09 - Dividend Received - DIV 300 Dividend @ 0.05 -
22-Jan-09 - Interim Trade - STO 3 Mar09 12.50 Call @ 0.59 - Expired
24-Mar-09 - Interim Trade - STO 3 May09 12.50 Call @ 0.46 - Closed
15-Apr-09 - Dividend Received - DIV 300 Dividend @ 0.05 -
04-May-09 - Buy Back and Roll Out - BTC 3 May09 12.50 Call @ -2.71 -
04-May-09 - Interim Trade - STO 3 Jun09 12.50 Call @ 2.94 -
11-Jun-09 - Option Exercised - EX 1 Jun09 12.50 Call @ 12.50 - Partial Exercise
12-Jun-09 - Cash to Secure Put - CSP 100 BJS @ 12.50 -
12-Jun-09 - Initial Put Position - STO 1 Jul09 12.50 Put @ 0.20 -

The 10 Commandments of Intelligent Investing

In Chapter 9 of Joe Ponzio's new book entitled "F Wall Street: Joe Ponzio's No-Nonsense Approach to Value Investing For the Rest of Us" he says "If intelligent investing were a religion, these would be its commandments".

1. Never invest in anything you do not understand.

2. Price follows value over the long run.

3. Price volatility does not imply any additional risk or reduced risk; the risk is in the price you pay and your evaluation of the opportunity.

4. The stock market is a place to buy and sell businesses, regardless of the myriad of other (or faster) ways to make or lose money in stocks.

5. There is no tomorrow, only "five years from now".

6. Earnings are for the IRS and accountants; business owners and silent partners (e.g. investors) rely on cash.

7. A great business is one that will survive the bad times, so wait for the bad times to invest in great businesses.

8. Unless it affects the business of your company or it's filed with the SEC, it's just noise. Analyst opinions and general market trends do not affect the business of your company and are not filed with the SEC.

9. He who turns over the most rocks wins.

10. If you don't have a margin of safety, you don't have a good opportunity.

These are some pretty insightful commandments and we would all do well to follow them.

KO - Adjustment

The following adjustment was made today on Coca Cola Company (KO):

08-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 45.00 Call @ -4.31 -
08-Jun-09 - Second Stock Position - BTO 100 KO @ 49.23 -
08-Jun-09 - Combined Cost Basis - $9,944.99 200 @ 49.72 -
08-Jun-09 - Interim Trade - STO 2 Jul09 47.50 Call @ 2.24 -
01-Jul-09 - Dividend Received - DIV 200 Dividend @ 0.41 -

Ex-dividend date for KO is 6/11 and they will pay a $0.41/share dividend on 7/1. The Jun09 45 call was ITM with less than $0.41 time value remaining and was therefore in danger of an early exercise to capture the dividend. Since I was unable to get a net credit by simply rolling to a Jul 45 call, and since KO is one of my core holdings, I decided to average down and buy an additional 100 shares. I was then able to roll up by selling 2 Jul 47.50 calls for a net credit of $17 plus the $82 for two dividends for a total credit of $99.

Current Position Summary:

Stock Investment: $9,944.99
Income Generated: $874.60
Percent Income Generated: 8.79%
Annualized Income Generated: 10.84%
Net Profit If Called: $429.61
Percent Return If Called: 4.32%
Annualized Return If Called: 5.33%
Days Held to Expiration: 296 days

Trade History:

24-Sep-08 - Initial Stock Position - BTO 100 KO @ 50.22 -
24-Sep-08 - Initial Call Option - STO 1 Oct08 50.00 Call @ 1.59 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 50.00 Call @ 0.79 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 50.00 Call @ 0.48 - Expired
15-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.38 -
22-Dec-08 - Interim Trade - STO 1 Jan09 47.50 Call @ 0.55 - Expired
22-Jan-09 - Interim Trade - STO 1 Mar09 47.50 Call @ 0.63 - Expired
24-Mar-09 - Interim Trade - STO 1 Apr09 45.00 Call @ 0.80 - Expired
01-Apr-09 - Dividend Received - DIV 100 Dividend @ 0.41 -
17-Apr-09 - Buy Back and Roll Out - BTC 1 Apr09 45.00 Call @ -0.21 -
17-Apr-09 - Interim Trade - STO 1 May09 45.00 Call @ 1.40 - Closed
15-May-09 - Buy Back and Roll Out - BTC 1 May09 45.00 Call @ -0.06 -
15-May-09 - Interim Trade - STO 1 Jun09 45.00 Call @ 0.99 - Closed
08-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 45.00 Call @ -4.31 -
08-Jun-09 - Second Stock Position - BTO 100 KO @ 49.23 -
08-Jun-09 - Combined Cost Basis - $9,944.99 200 @ 49.72 -
08-Jun-09 - Interim Trade - STO 2 Jul09 47.50 Call @ 2.24 -
01-Jul-09 - Dividend Received - DIV 200 Dividend @ 0.41 -

ADP - Adjustment

The following adjustment was made today on Automatic Data Proccessing (ADP):

08-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 37.00 Call @ -1.30 -
08-Jun-09 - Interim Trade - STO 1 Jul09 37.00 Call @ 1.74 -
01-Jul-09 - Dividend Received - DIV 100 Dividend @ 0.33 -

Ex-dividend date for ADP is 6/10 and they will pay a $0.33/share dividend on 7/1. The Jun09 37 call was ITM with less than $0.33 time value remaining and was therefore in danger of an early exercise to capture the dividend. So, I rolled it out to a Jul09 37 Call for a net credit of $44 plus the $33 for the dividend for a total credit of $77.

Current Position Summary:

Stock Investment: $4,308.00
Income Generated: $707.00
Percent Income Generated: 16.41%
Annualized Income Generated: 20.17%
Net Profit If Called: $99.00
Percent Return If Called: 2.30%
Annualized Return If Called: 2.82%
Days Held to Expiration: 297 days

Trade History:

23-Sep-08 - Initial Stock Position - BTO 100 ADP @ 43.08 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 42.50 Call @ 1.75 - Expired
20-Oct-08 - Interim Trade - STO 1 Nov08 37.50 Call @ 0.84 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 40.00 Call @ 0.46 - Expired
22-Dec-08 - Continued Trade - STO 1 Feb09 42.50 Call @ 0.91 - Expired
01-Jan-09 - Dividend Received - DIV 100 Dividend @ 0.33 -
24-Feb-09 - Interim Trade - STO 1 Apr09 37.50 Call @ 0.75 - Expired
01-Apr-09 - Dividend Received - DIV 100 Dividend @ 0.33 -
21-Apr-09 - Interim Trade - STO 1 May09 39.00 Call @ 0.34 - Expired
18-May-09 - Interim Trade - STO 1 Jun09 37.00 Call @ 0.59 - Closed
08-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 37.00 Call @ -1.30 -
08-Jun-09 - Interim Trade - STO 1 Jul09 37.00 Call @ 1.74 -
01-Jul-09 - Dividend Received - DIV 100 Dividend @ 0.33 -

Value Investing: Marathon vs Sprint

The following is taken from a recent discussion on the JustCoveredCalls Yahoo group.

My thinking is different from most investors, but it wasn't always like that. Like many, I started out in covered calls as a sprinter, wanting to get back to cash every month to start over. That was until I got interested in value investing and changed my strategy into more of a marathon.

I look at the stock market a lot differently now. I no longer think in terms of stocks and stock prices. Instead I treat investing from the business owner perspective. The stock market is just a place to buy and sell businesses.

I determine how well a business is performing based on it's Statement of Cash Flows. The other metrics that Wall Street uses, like EPS, can be faked by accounting. But cash is king. A company that doesn't generate enough cash to pay for it's operations is doomed to fail. Enron was a prime example. They had negative cash flow for years before their collapse, while their EPS was skyrocketing due to fake accounting. So, I look for companies that generate more cash than they spend.

Think about this for a minute. If you earn more money than you spend, and have some left over to invest, your net worth and income will grow. Well, it's no different for businesses.

Balance Sheets and Incomes Statements are primarily used for tax reporting and therefore don't reflect the true picture of how well a business has performed. Do you measure your annual performance by your tax return? Probably, not. So why do that for businesses?

Wall Street focuses on the Income Statement to calculate EPS and P/E ratio, however these are not a true picture of valuation.

Most businesses use the "accrual" method of accounting, meaning they book sales when the orders are placed, not when they receive the payments. For major purchases/expenses, they depreciate/amortize them over time rather than record the actual amount paid. This can inflate their earnings and show positive earnings even when cash flow is negative (e.g. Enron). While this is fine for tax reporting, it doesn't tell prospective business owners (i.e. investors) how well the actual business performed.

The Statement of Cash Flows is the heart of a business, since it reports how much cash was generated, how much cash was spent, and how much cash is left over for paying dividends and re-investment into the business. Without cash, a business can not grow. So, this is the primary metric that I look at when analyzing a business.

I've known about cash flow for some time, since I'm a follower of Graham/Buffett. Buffett calls this owner earnings, which is slightly different from free cash flow. It's more involved to calculate owner earnings, since you need to dig into the financial statements to pull the information you need. A simpler approach is to use free cash flow, which is Cash from Operations minus Capital Expenditures. For large stable companies, like the type I usually invest in, using free cash flow is fine, although the results tend to be a bit higher than owner earnings.

This is all explained in easy to understand terms in Joe Ponzio's new book entitled "F Wall Street: Joe Ponzio's No-Nonsense Approach to Value Investing For the Rest of Us". This is probably one of the easiest reads on value investing I've read. I've followed Joe's F Wall Street blog almost since the beginning and have learned a lot from him. Thanks Joe!

A Must Read Book

I'm an avid reader of financial books and usually read several books every year. Occasionally, I come across a book that I think every investor should read. The book I'm currently reading is not just a "should" read book, it's a "must" read book. It's Joe Ponzio's new book entitled "F Wall Street: Joe Ponzio's No-Nonsense Approach to Value Investing For the Rest of Us".

I've followed Joe's F Wall Street blog for a long time and have always found it to be insightful. I was looking forward to his new book and so far I haven't been disappointed. I just started reading it this week and have only read the first four chapters, but I can already say that this is one of the best investing books I've ever read.

So if you don't already own a copy I highly recommend that you click the link above to purchase it from Amazon. It will be one of the best investments you'll ever make.

TLT - Adjustment

The following adjustment was made today on iShares Trust Barclays 20 Year Treasury Bond Fund (TLT):

05-Jun-09 - Buy Back and Roll Down - BTC 3 Jun09 100.00 Call @ -0.06 -
05-Jun-09 - Interim Trade - STO 3 Jun09 94.00 Call @ 0.29 -
05-Jun-09 - Dividend Received - DIV 300 Dividend @ 0.31 -

NOTE: All 3 TLT positions were combined into 1 position.

Current Position Summary:

Stock Investment: $33,620.95
Income Generated: $2,329.56
Percent Income Generated: 6.93%
Annualized Income Generated: 14.13%
Net Profit If Called: -$3,091.39
Percent Return If Called: -9.19%
Annualized Return If Called: -18.75%
Days Held to Expiration: 179 days

Trade History:

22-Dec-08 - First Stock Position - BTO 100 TLT @ 121.03 -
22-Dec-08 - Initial Call Option - STO 1 Jan09 121.00 Call @ 3.39 - Expired
02-Jan-09 - Dividend Received - DIV 100 Dividend @ 0.41 -
20-Jan-09 - Interim Trade - STO 1 Feb09 113.00 Call @ 1.39 - Expired
24-Feb-09 - Interim Trade - STO 2 Mar09 110.00 Call @ 1.09 - Expired
22-Jan-09 - Second Stock Position - BTO 100 TLT @ 108.96 -
22-Jan-09 - Combined Cost Basis - $22,998.95 200 @ 114.99 -
22-Jan-09 - Initial Call Option - STO 1 Feb09 109.00 Call @ 2.84 - Expired
06-Feb-09 - Dividend Received - DIV 200 Dividend @ 0.29 -
24-Feb-09 - Third Stock Position - BTO 100 TLT @ 106.22 -
24-Feb-09 - Combined Cost Basis - $33,620.95 300 @ 112.07 -
24-Feb-09 - Initial Call Option - STO 1 Mar09 106.00 Call @ 2.59 -
06-Mar-09 - Dividend Received - DIV 300 Dividend @ 0.28 -
24-Mar-09 - Interim Trade - STO 3 Apr09 105.00 Call @ 0.79 - Expired
07-Apr-09 - Dividend Received - DIV 300 Dividend @ 0.30 -
07-May-09 - Dividend Received - DIV 300 Dividend @ 0.30 -
15-May-09 - Interim Trade - STO 3 Jun09 100.00 Call @ 1.09 - Closed
05-Jun-09 - Buy Back and Roll Down - BTC 3 Jun09 100.00 Call @ -0.06 -
05-Jun-09 - Interim Trade - STO 3 Jun09 94.00 Call @ 0.29 -
05-Jun-09 - Dividend Received - DIV 300 Dividend @ 0.31 -

CNI - Adjustment

The following adjustment was made today on Canadian National Railway (CNI):

02-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 40.00 Call @ -5.04 -
02-Jun-09 - Interim Trade - STO 1 Jul09 40.00 Call @ 5.56 -
30-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.25 -

Ex-dividend date for CNI is 6/4 and they will pay a $0.25/share dividend on 6/30. The Jun09 40 call was ITM with less than $0.25 time value remaining and was therefore in danger of an early exercise to capture the dividend. So, I rolled it out to a Jul09 40 Call for a net credit of $52 plus the $25 for the dividend for a total credit of $77.

Current Position Summary:

Stock Investment: $5,201.00
Income Generated: $1,011.42
Percent Income Generated: 19.45%
Annualized Income Generated: 23.90%
Net Profit If Called: -$189.58
Percent Return If Called: -3.65%
Annualized Return If Called: -4.48%
Days Held to Expiration: 297 days

Trade History:

23-Sep-08 - Initial Stock Position - BTO 100 CNI @ 52.01 -
23-Sep-08 - Initial Call Option - STO 1 Oct08 50.00 Call @ 3.19 - Expired
30-Sep-08 - Dividend Received - DIV 100 Dividend @ 0.22 -
30-Sep-08 - Withholding Tax - TAX 1 CA Tax @ -0.03 -
20-Oct-08 - Interim Trade - STO 1 Nov08 45.00 Call @ 1.04 - Expired
24-Nov-08 - Interim Trade - STO 1 Dec08 40.00 Call @ 0.46 - Expired
22-Dec-08 - Interim Trade - STO 1 Jan09 40.00 Call @ 0.24 - Expired
31-Dec-08 - Dividend Received - DIV 100 Dividend @ 0.19 -
31-Dec-08 - Withholding Tax - TAX 1 CA Tax @ -0.03 -
23-Jan-09 - Interim Trade - STO 1 Feb09 35.00 Call @ 1.29 - Expired
24-Feb-09 - Interim Trade - STO 1 Mar09 35.00 Call @ 0.64 - Expired
24-Mar-09 - Interim Trade - STO 1 May09 40.00 Call @ 1.14 - Closed
31-Mar-09 - Dividend Received - DIV 100 Dividend @ 0.20 -
31-Mar-09 - Withholding Tax - TAX 1 CA Tax @ -0.03 -
04-May-09 - Buy Back and Roll Out - BTC 1 May09 40.00 Call @ -3.66 -
04-May-09 - Interim Trade - STO 1 Jun09 40.00 Call @ 4.49 - Closed
02-Jun-09 - Buy Back and Roll Out - BTC 1 Jun09 40.00 Call @ -5.04 -
02-Jun-09 - Interim Trade - STO 1 Jul09 40.00 Call @ 5.56 -
30-Jun-09 - Dividend Received - DIV 100 Dividend @ 0.25 -