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Tuesday, August 19, 2008

Establish Altria Covered Calls

A new covered calls position was established today in the Covered Calls Advisor Portfolio(CCAP) as follows:

Established Altria (MO) Covered Calls for Sep08.

08/19/08 Bought 500 MO @ $20.91
08/19/08 Sold 5 MO Sep08 $21.00 Calls @ $.51
Note: Returns below include $.29 ex-dividend on 9/11/08.

Annualized Return If Stock Price Unchanged (ARIU): +43.6%
Annualized Return If Exercised (ARIE): +48.5%
Downside Breakeven Protection: 3.8%

Note: If the call options are exercised early on 9/10/08 to capture the dividend on 9/11/08, then an annualized return of 47.6% would be achieved.

With this investment, the Covered Calls Advisor Portfolio (CCAP) is now fully invested with Sep08 covered calls positions.

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