Jul 20 2008

Lehman Covered Call Results

Sometimes it is better to be lucky than right….Going into Wednesday of this week, I was telling myself that I should have never entered into the second covered call a month ago when Lehman (ticker: LEH) was at trading at $24.20. During that posting, I still had the opportunity of a gain…

But miraculously, in the last two days of the week, LEH rose from $16.65 to close at $19.11 executing my covered call strategy that I was engaged in for about two months.  I guess I have to thank the SEC with the recent announcement to slow down the naked short selling, definitely benefiting the financial sector.  In the below exhibit, you will see the 5-day chart of Lehman that saved the day for my trade.

With this rollercoaster of a paper trade, I have captured a 1.7% net gain after commissions and taxes, resulting in a 16.1% annual percentage rate (APR). This trade outperformed the S&P 500 as a benchmark, which performed at a -7.4% over the same time period. Here are the results of the entire trade, which I will track in my portfolio

 

Have you been successfully with this trade, if so let me know by leaving a comment.  If you are interested in getting the latest posting from Finance Puzzle, please subscribe.

Author Disclosure: At the time of posting, I am neither long nor short LEH. This trade is a “paper” trade and is being used for educational purposes.

Bookmark and Share

LEAVE A COMMENT

Subscribe Form

Subscribe to Blog

Finance Puzzle Friends

Cash advance loans from DollarsDirect are usually approved in as little as thirty minutes.
Apply for payday loans with easy five-minute online application.
Bettertrades helps you in making money on the stock market.Whether you want to trade stocks or options Freddie Rick will guide you to make better decisions in your trading.
Advertise Here - Text Link Ad $10 until Dec 31, 2009 Contact me now! Selling only one space

Support Finance Puzzle

What I’m Doing….

UBD Moneymaker Theme by Unique Blog Designs & Phillip van Coller