10% just like that (actually %6.5)!

So my stragety of buying leaps and selling the short term calls on AMD is not working out correctly. The problem for me is that I did not have a plan as to which calls I should sell, as I did not want to get called out and lose any money.

The safer approach would be to by the shares outright and then sell the calls. But my returns (%) would be much lower and would require much more cash.

But that is the safer approach and one that I am more familiar with, so that is the way I should try this approach, and then move to holding leaps instead of the asset.

I just tried this with DRYS. This stock is very volatile and that is what is needed to get the premiums to make a good return. I 100 shares at $62.5 and immediately sold 1 $60 April call for $6.50. That means I recieved $650 for a &6200 investment. 10% right off the bat. If the stocks stays above $60, I will be forced to sell my shares at $60 (a $2.50 loss resulting in a net gain of $400) resulting in a %6.5 gain. That is not bad for 1 month.

If the stock drops below $60, then I keep the shares and the money from the call, and I reduce my purchase price of the stock by $6.50 to $56.50. So as long as the stock does not fall below 56.50 by April 18th I should make money anywhere from %0-%6.5

Dorfman revisted

Its been a while since I posted. Much has happened, and I've been very busy. I consider myself very lucky, as I had been eying BearStearns for a while now, but luckily I did not get in. Wow, the 5th largest investment company in the US is basically insolvent. We are in a lot of trouble.

From what I understand, they have been in a 1:30 margin with their bets on these mortgages. Now all that money is gone, and so it appears is the company.

I wonder if my accounts at my brokerages are in trouble. I will have to look into that.

Anyway, Dorfman was big on BSC and he must have gotten killed on it. But he is back with a new set of picks, and I wanted to note them to see how they do:

CMC - Commercial Metals
OSG - Overseas Shipholding Group
AZN - Astrazeneca
COLM - Columbia Sportswear
DVN - Devon Energy
GS -Goldman Sachs
MTN(short) - Vail Resorts