pacman > Trade Notes

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Brokerage Account
5 Day -46.68%
15 Day -47.30%
1 Month -50.62%
3 Month -70.04%
6 Month -76.66%
As of: 11/21/08

Member since: Nov 07

Sold to Open EUS CH at 0.20

Users Bought (30 Days) 0 (0%)
Users Sold (30 Days) 0 (0%)
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Transaction: Sold to Open
Symbol: EUS CH
Quantity: Not Shared
Price: $0.20
Value: $Not Shared.
Stop Order: No @ $N/A
Target Price: $0.00

This is the second part of my roll.  Had the Mar $5 and rolled to the Mar $4 for a credit.  Overall, lowered my basis.  As always with covered calls, if the stock pops, I will be green, but am trading potential gains for modest gains and protection. 

Comments are welcome - I am new at this still.   

Edited by pacman at 10/07/08 10:20 PM

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Doji

Member since: Mar 08

Trades 4
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Age: 50's
NY, CA and NC
Doji
Why are you writing covered calls on a dying company?  Did you have a protective put in place when you went into it? 
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pacman

Member since: Nov 07

5 Day -46.68%
15 Day -47.30%
1 Month -50.62%
3 Month -70.04%
6 Month -76.66%
As of: 11/21/08
Trades 59
Trade Notes 37
Blog Posts 0
pacman

Dying?  Well that is still heavily debated in many forums... and they might, but currently I am long, really long.  I do think they are hurting, but I believe there will be a slow comeback, and there are always rumors of a takeover. 

As for the protective put? Nope.  I guess I should probably look into that part of the protection side.  I didn't get into ETFC until they were already down here, so I am not hurting from their big drop.

Thanks!

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Doji

Member since: Mar 08

Trades 4
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Age: 50's
NY, CA and NC
Doji
That's a good thing, then, that you bought low.  In this type of market, (unpredictable, under extreme pressure) you might want to look into a strategy of buying a long term put if you plan to write for cash, and write the calls where they won't be assigned.  If you do get called, you can keep the put anyway in case the stock should back down again.  Also, if you believe in the company's ability to turn around or get taken over, then you are seriously limiting your profit potential by writing a call at all.  I would say better just buy the put and hold for the explosion.  I'm not an expert, btw, but I've done large numbers of covered calls.
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TK All-star

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Pacman,

 

Several of your Trade Notes were featured in the All-Star Trades blog! Check it out here.

 

 --Nicole Wachs

TradeKing Staff

All-Star Commentator

 

For a list of previous All-Star Trades, please click here.

 

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TK All-star

Member since: Feb 08

Trades Not Shared
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Blog Posts 133

Age: 30's
TK All-star
 

Pacman,

 

Your "video game" earned an "extra play" - Part 2 of the All-Star Commentary is now available. Read all about it here.

 

--Nicole Wachs

TradeKing Staff

All-Star Commentator

 

For a list of previous All-Star Trades, please click here.

 

Options involve risk and are not suitable for all investors.

Please read Characteristics and Risks of Standardized Options.

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