After an extreme pullback in AT&T's stock over the past week, I decided to leave 100 shares of my position uncovered, and wait for a move higher, while establishing a further out call in order to capture premium, while still allowing for an upside movement. The new metrics for the 100 shares which are now covered is below:
Transaction History:
2/21/2009 -- Additional Stock Purchased -- Bought T @ 23
2/27/2009 -- Sold To Open 1 T April $20 Call @ 3.95
3/10/2009 -- Bought To Close 1 T April $20 Call @ 2.93
3/10/2009 -- Sold to Open 1 T April $25 Call @ .34
3/13/2009 -- Bought To Close 1 T April $25 Call @ .84
3/13/2009 -- Sold To Open 1 T April $26 Call @ .39
4/7/2009 -- AT&T Dividend @ .41
4/17/2009 -- Covered Call Expire
4/20/2009 -- Sold To Open 1 T May $27 @ .43
5/15/2009 -- Covered Call Expire
5/20/2009 -- Sold To Open 1 T Oct $27 @ .65
The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $4,812.50
Downside Coverage (based on current share price): 9%
Possible Max Upside: 28.71% (not including July and Oct dividend which would make this 33%)
Annualized Max Upside: 44.04% (not including July and Oct dividend which would make this 50%)
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