A Look At Covered Calls Jan 4 2012 Update

So here we are on Jan 5 on our first covered call cycle, with a couple of weeks to expiry. I'm updating today because a couple of these positions now have very little extrinsic value left and could be rolled up to pick up a bit more extrinsic.

As to the P/L situation, I took the snapshot of the market a little earlier and this is how we stand:

GS

The stock is trading at 95.51, up 2.2% since inception last month

I rolled the option and got $5.95, a profit of $0.70 a further 0.75%, combined profit  of 2.95% so far. So for GS we are at this stage just a little bit further ahead with the covered call strategy.

I've gone and written the Jan12 95 call for $2.93

FCX


The stock is trading at 39.75, up 7.1% since inception last month

However our Jan12 37 call is $3.35 at the offer, an open loss of  $1.03 (not worth rolling this one) and 2.8%. For the strategy we are up $4.3%

Yes, around that magic 4% profit mark at the moment, but lo! We would be better off just holding the stock at the point.

NOV


The stock is trading at 70.49, up 9.4% since inception last month

I rolled the option and got $5.90, a loss of $2.45 which is 3.8%, combined profit  of 5.6% so far. So for NOV we are at this stage behind with the covered call strategy, even though on the face of it we are above the 4% per month thing

I've gone and written the Jan12 70 call for $2.36


I stress that at only a couple of weeks into this, these results are fairly meaningless and only worthy of reporting because of the adjustments. As we get a few months into this, it will get a lot more interesting.