Petrobras (PBR)

This position is in Petrobras, a Brazilian oil & gas conglomerate. This position was originally opened in October after PBR had reached a new 52-week low. Petrobras is one of the most technologically advanced deepwater oil companies in the world, and as such would be primed to participate in the development of future deepwater projects, which are going to be the majority of new oil developments. Based on the current price, however, it is likely that this position will be exited at expiration in January. The profit/loss info is below:

Based on the current cost basis, the potential annualized return for this position if called at expiration in January would be 23.56%.

Encana Corporation (ECA)

This position is in Encana Corporation, a Canadian-based natural gas company. Encana is focused on developing unconventional natural gas formations including shale, tight-gas, and coal-bed methane. The company yields almost 3%, and has generated an average operating margin of about 25% over the past 5 years, with a number of years nearing 50%. The company also has a very intriguing chart which in my opinion demonstrates the perfect type of chart for covered calls investing. The stock has remained rangebound between $26 and $35 for the past year. So essentially, while you receive call premium for holding the stock your also being paid a nice dividend. This has resulted in a potential annualized gain of 20% since the stock was originally purchased in August. The profit/loss info is below:

Based on the current cost basis, the potential annualized return for this position if called at expiration in January would be 20.21%.

Abbott Labs (ABT)

This position is in Abbott Labs, a pharmaceutical company. This position was originally opened in January, as part of the Covered Call Dividend portion of the CCIP. The purpose of this type of position is to utilize ex-dividend dates as potential option call dates in addition to the normal expiration. This idea is based upon the fact that the owner of a call, can purchase the stock at the referenced strike if the stock price is currently above the strike. If the time premium remaining on the option is less than the upcoming dividend, often times the stock will be called away, greatly increasing the annualized return. If it is not called away, then I receive the dividend (which is taxed more favorably) and still keep the stock. The important purchase metrics are below for insight into possible profit and loss (these all include commissions):

Based on the current cost basis, the potential annualized return for this position if called at expiration in February would be 5.43%.

MEMC Electronic Materials (WFR)

This position is in MEMC Electronics Materials which is a manufacturer of silicon products for use in the solar power market as well as consumer electronics. The position was originally opened in the beginning of this year, and the stock itself has underperformed thus far. However, as a result of selling calls against the position, the cost basis has been reduced to a point where any upward movement in the stock would be profitable from this point. The transaction info, and potential return are below:

Based on the current cost basis, the potential annualized return for this position if called at expiration in January would be 1.1%.

Current Positions

Posts will resume with current status of each position in the portfolio.

Back up and running....

After a long hiatus, I will be restarting posts in 2011. First step updating everyone on current holdings and the streamlined investing plan.

Blog posts moving to twitter - follow @cranjangles