Covered Call

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For investors who want to trade covered calls and make money.

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See BUZZ'S BUZZ for January 28, 2010

The Covered Call Analyzer is an online investing tool that finds the best covered call buy/writes (buy the stock and sell the calls). Our subscribers can run the Analyzer at any time. Thousands of combinations are analyzed using our special algorithms to determine which calls the professional traders are buying, thus driving up the premiums. They probably know something you don't about the stock. These are the buy/writes you want to invest in, too. After you input your personal parameters, the Analyzer finds these good buy/writes and tells you exactly what to do:

Buy 200 shares of MENS WEARHOUSE INC THE (MW) at $21.64  (closing last trade price) and sell 2 call  Out-of-the-Money contracts of MW LX (Dec$22.50) at $0.60 (closing bid price) expiring on 12/19/2009. Cost is $4,348, and income from sale of the calls is $107 and includes your commissions.  Annualized return if called is 167%.

In addition, we provide our subscribers with two lists (20 Aggressive and 20 Conservative buy/writes) and two portfolios ($100,000 Retirement and $10,000 Aggressive) each month on expiration  weekend, using the best buy/writes found by the Analyzer. We publish all our results.

There are two pages the first time visitor should review. These are the "Short Course" and the "How to Use This Site"pages. Under the Resultssection, you can see the history of all our monitored lists and portfolio transactions going back to 1999. Subscribers get 30 days of free service and then the monthly charge is $19.95.




Buzz's Buzz

February 4, 2010

I have mentioned "toppy” in several of my Buzz’s in the last few months. This week is demonstrating that we are there. The markets are beginning to react with fear - most of it generated by Washington. Many were anticipating better unemployment numbers tomorrow, but they aren't going to get them. There will probably be an increase in the unemployment percentage.

It is more important than ever to have a strategy that identifies good resilient stocks.

In the last week the volatility index has shot up. This is primarily due to downward movements rather than upward movements. In the last few months, volatility has been low as the markets were moving up, but slowly. This week markets have moved downward - rapidly.

At this time, we should be looking at the conservative approach rather than the aggressive approach. Back on December 12, 2009, I said, "it is best to be on the conservative side". This is proving to be true.

If you look at our two January lists (Aggressive and Conservative) you will notice that 10 of our 20 Aggressive stocks have gone below the get-out price (-15%). These are much more volatile stocks and have moved down rapidly with downward volatility. Even with 10 stocks sold at the get-out price, the total Aggressive List down only 6.0%.

Only 1 of the 20 Conservative stocks has gone below the get-out price. The table on the right shows that our Conservative List and our $100,000 Retirement Portfolio (which is also conservative) are doing better, on a percentage basis, than the Aggressive List and the $10,000 Aggressive Portfolio. Also note that the Conservative Lists and both portfolios are doing better than the S&P 500, down 6.4%, as well as the DOW, down 5.7% and the NASDAQ, down 7.1%

Don’t forget the get-out rule – especially now!!!


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Each month, on expiration weekend, we publish and monitor two lists and two portfolios to help the investor better understand how to invest with covered calls. These buy/writes are identified by the Analyzer. Take a look at how are we doing vs. the Markets.

January 16, 2010 to February 4, 2010*

$10,000 Aggressive Portfolio - after plowing all premiums back into the portfolio.

(0.4%)

$100,000 Retirement Portfolio - after taking $2,000 income.

(0.1%)

S&P500

(6.4%)

January 16, 2010 to February 4, 2010*

Aggressive Stocks-to-Consider List

(6.0%)

Conservative Stocks-to-Consider List (2.9%)

S&P500

(6.4%)

*These percentages represent the list or portfolio value at this date. We will generally not update individual pages with current prices on this date, but will update all prices on the next expiration weekend.

 

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Orland Park, IL 60462

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Good Luck and Profitable Investing!!!

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