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URL:  https://boards.fool.com/emmette-i-consider-my-ira-the-pay-me-portfolio-24942726.aspx

Subject:  Re: Covered Call Strategy Date:  12/17/2006  9:06 AM
Author:  JoKingMe Number:  7743 of 11335

Emmette,

I consider my IRA the 'pay me' portfolio and tend to have covered calls written on most of my holdings in those accounts.

Your initial trades on 11/3 generate 3% return if called in 15 days. This is a great return for a short period, but leaves you with another decision should the stock move up slightly. I require all my option position to be a minimum of 10% total return if called. I want to get paid for my decision making of finding a good stock. 3% just isn't enough commission, even if it is a short term trade.

I'd have done a Dec 55 on 11/3 and probably gotten $1.25 or better (22% AINC). I'd have made less than you in this situation, but I'd have known I was going to get my 10%+ if called away.

How much of your success was based on having the good fortune of ESV dropping from 53+ to just over 50 in order to allow you to close your initial 50 call to write the 55? How would this look had the stock been at $51 or 52 instead of back to $50?

I don't like buying a stock and hoping that it doesn't go up. I'd prefer to just hope it doesn't go up too fast in the short term, but if it does, I'm getting paid.

John
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