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Monday, August 18, 2008

Establish Hewlett-Packard Covered Calls

The Covered Calls Advisor Portfolio(CCAP) Aug08 position in Hewlett-Packard (HPQ) was in-the-money on expiration Friday and the stock was therefore called away. It was decided to re-buy HPQ to re-establish a new covered calls position in HPQ for Sep08 as follows:

Established Hewlett-Packard(HPQ) Covered Calls for Sep08.

08/18/08 Bought 200 HPQ @ $44.34
08/08/08 Sold 2 HPQ Sep08 $45.00 Calls @ $1.55

Annualized Return If Stock Price Unchanged (ARIU): +37.2%
Annualized Return If Exercised (ARIE): +52.4%
Downside Breakeven Protection: 3.7%

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