Another stock I used for covered call writing in my portfolio was Demand Media (DMD). You can see the previous trades here.
As you can see I opened the first covered call in December last year. The trade didn’t go as well as I would expect (the stock wasn’t called away), so I bought back almost worthless covered call and sold a new one. Since then the trade progressed in my favor and brought 11.24% gain as of the last Friday (31.60% annualized return).
Since the last covered call expired worthless this morning I could sell another covered call against this stock, generate more income, and improve overall trade.
Trade Detail
This morning I sold another covered call:
05/20/2013 09:30:02 Sold 1 DMD Nov 16 2013 10.0 Call @ 1.2
| Own 100 shares DMD: | $9.50 |
| Strike: | $10.00 |
| Sold 1 Covered Call: | $1.20 |
| Total Purchase: | $120.00 |
| Commissions: | $8.78 |
| Total purchase: | $751.31 |
| Expected Option Assignment: | $1000.00 |
| Option Assignment Fee: | $19.00 |
| Expected Proceeds: | $981.00 |
| Expected Net Gain: | $229.69 |
| Expected ROI: | 30.57% |
This trade added to my overall income generated in May 2013 to be $220 so far. This helped me to meet and maintain my goal to generate monthly at least $100 thru options trading. If this trend continues I should be able to exceed my goal.
How are you generating income from your investments?
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