Investment Enhancing Systems, Inc. – Covered Call Analyzer

To see the details of all the covered call transactions in a particular month click on that month below. A new window will open and you can see just what happened with a particular transaction. Close that window to get back to this page.

2006 Month	Total Dollar Return when the Stock is Called	Change in Value of Stocks Still Held	Month Total
January	+$5,620	all positions closed out	+$5,620
February	+$5,526	all positions closed out	+$5,526
March	+$550	all positions closed out	+$550
April	($5,568)	all positions closed out	($5,568)
May	($5,449)	all positions closed out	($5,449)
June	+$5,858	all positions closed out	+$5,858
July	+$8,341	all positions closed out	+$8,341
August	+$5,424	all positions closed out	+$5,424
September	+$7,246	all positions closed out	+$7,246
October	+$1,413	all positions closed out	+$1,413
November	($258)	all positions closed out	($258)
December	($4,349)	all positions closed out	($4,349)

In 1999 Investment Enhancing Systems, Inc. began publishing an Aggressive "Stocks-to-Consider" list. Each month on expiration weekend (the third weekend of the month) we run the Covered Call Analyzer using our default parameters and the "high PE or no earnings: selection. We then select and publish a list of the ten (10) stock/call combinations, identified by the Analyzer, that have high dollar income for the sale of the calls. We have done this with education in mind. Our objective is to help the investor understand how to use covered calls and what to do if the stock does not get called or tanks. We publish our results here. Many of our customers Run the Analyzer, with their own parameters and make their own selections, or select stock/call combinations from our list. Because this is an aggressive list, it has more risk than the Conservative list because it includes stocks with high PEs or no earnings. Sometimes we label individual stock/call combinations as "risky".
We assume that there is $10,000 for the purchase of each stock listed (purchased in lots of 100 shares). In some cases we spend much less to purchase the stock. If the stock costs $35.00 we can only buy 200 shares and the cost is only $7000 plus commissions.
Our objective is to have the stock called in the next month, but that doesn't always happen. It then becomes necessary to decide whether to sell more calls for the next month, hold or sell out. We establish a get-out price at -15% and sell the stock if it drops 15% below our purchase price. Because the stock purchased is "covered" by the sold calls, we must buy back the call contracts before selling the stock at the get-out price. The buy-back of the calls is usually at a much lower price than what they were originally sold for, producing some premium against the drop in stock price. We strongly recommend establishing a get-out price and then sticking to it. Results for each month are determined by calculating:

"Total Dollar Return when the Stock is Called" (call income [not at risk] plus stock price appreciation to strike price, including commission effects).

"Change in Value of Stocks Still Held" (value of stocks not reaching strike price plus call income, including commission effects).

There are good months and bad months, but overall for the year, the Covered Call Analyzer produces good returns. Results are shown in the following table, which are updated each month on expiration weekend until all positions are closed out. Click on a month to see the detail of how each "Stock-to-Consider" was handled. Remember, PATIENCE pays off.

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