After going back into the green for this year's realized, I figured I could take a breather from writing and trading the covered calls that I had been doing almost every other day- that was a mistake. There was a pretty good up day on Monday, and I decided not to write some calls on my usuals: JASO and LDK. Both are down over 20% from Monday, and had I wrote pretty much any call at any of the strike prices within 1-2 strike prices of the stock price on Monday, I would be sitting on a nice % profit right about now.
I continue to learn lessons. I think in a bearish/recession-looming market, writing covered calls on every rally, no matter how great or little the rally is, is the way to go. The overall trend should be down in a market like this, so even if the stock rises after you wrote the covered call, in all likely-hood, the price will come back down again. For covered calls, Falling price + Time Decay = $$$. I really think covered calls should work well in this type of market. I may try to be more aggressive on the covered calls by writing calls that are below the current market price (or calls that are ITM) of the stock to get more premium.
On a side-note, it should be interesting to see how JASO fairs in the next few days and next week as it is the first solar stock to split. A 3-for-1 split of JASO ADS will happen on the 8th I believe, but today was the ex date. I'm hopeful, knowing that JASO has had good earnings since it IPO'd and at around $15 post-split, it should be a better buy at that price than some other solar plays such as SOLF, CSIQ, ENER, etc. ENER has yet to meet analysts expected earnings, and they report tomorrow. A positive earnings there could help give the solar sector a boost in what has been a devastating start to 2008 so far.
