It’s been a while since I have gone into any depth on activity on this account, but you know what? That’s the way it’s designed. This is not an active trading account and I never intended to trade any more than a maximum of once a month. So, this was the week that I looked at all the positions and decided what to do and this is what I came up with:
LLY – this is a new acquisition from the additional capital that was put into this account. It’s a great company that fell off my radar for several years. I’m not sure what reminded me about this one, but my fundamental analysis indicated this is a very good candidate – that plus the very fine 5.6% annual dividend yield didn’t hurt either. So on May 5th I entered with a buy/write and I have already rolled the original MAY 36 Call to JUN for an additional 32¢ credit.
NYX – Rolled the MAY 28 to JUN 28 for 35¢ credit.
KFT – Rolled MAY 29 to JUN 29 for 23¢ credit
T – the MAY 27 Call will probably expire OTM, but I will keep an eye on it.
QCOM – the current JUN 39 does not require any adjustment at this time
NOK – I bought back the MAY 36 Calls for 1¢. I didn’t want to incur a commission on a roll so that’s why I bought it back outright. The stock is currently pretty far OTM and all pennies count. A roll would have cost me $3.75 to buy back the short MAY Calls. I then sold JUN 12 Calls for 21¢. I am still upside-down on this.
The table on the left illustrates the realized gain on each stock if they are called out, or assigned, in June. Some of them have not paid there next dividend and that dividend is not included, even though JUN expiration may be after the dividend payout. Overall if they all got called it wouldn’t be a bad thing, but my intent is to continue to write calls against these stocks until they stop performing as well as they are. NOK is the only one not performing well. I will not unload it yet – taking a wait-and-see attitude.
From an overall balance perspective, the account is still down for the year solely because of TZA – the insurance policy (well, NOK and T are not much help either). TZA was looking pretty good last Friday after the huge pullback, and the shares in the account weathered the drop rather well. As I have mentioned in the past, that’s the price of doing business in this type of hedged conservative account and I’m not concerned, I just wish I could have entered TZA around the current $6 price instead of the average cost of $11.36, but wishing will not make it so.
Make sure you visit my Conservative Account page (click the tab above) for all the details.
◄ Jeff ►
