Initial Transaction - Genco Shipping (GNK)

An initial position in GNK was established on March 30, 2009. This position was actually found using a free option analyzer that I found earlier in the week which shows you the covered call stock/option combinations with the highest possible return. Using this I looked for a stock in an industry area which I did not currently have in my portfolio and that I believed would not add a lot of risk. The first stock on the list which met this criteria was Genco Shipping which is company which mostly charters its boats to charterers who transport dry goods. All stocks in this space have been battered in the recession, and Genco was not immune as it has dropped 86% from its peak. It was decided to establish a position and sell an at-the-money call, as the stock market has increased substantially since its bottom on March 9, it was my assumption that by options expiration on April 17, there was a possibility for the market to start moving downward or stagnate.

3/30/2009 -- Bought 100 GNK @ 12.635
3/30/2009 -- Sold To Open 1 GNK April $12.50 Call @ 1.36


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $1263.50


Downside Coverage: 10.76%
Possible Max Upside: 10.47%

Annualized Max Upside: 125.6%

Initial Transaction - Direxion Large Cap Bull 3x (BGU)

A position in Direxion Large Cap Bull 3x Shares was established on March 24, 2009. This ETF returns 300% of the Russell 1000 index.

3/24/2009 -- Bought 100 BGU @ 25.395
3/24/2009 -- Sold To Open 1 BGU April $29 Call @ 1.20


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $2539.50


Downside Coverage: 4.7%
Possible Max Upside: 19.9%

Annualized Max Upside: 238.3%

Initial Transaction - Direxion Small Cap Bull 3x (TNA)

A position in Direxion Small Cap Bull 3x Shares was established on March 23, 2009. This ETF returns 300% of the Russell 2000 index. Since a position was established in BGU, an ETF which returns 3x large cap stocks with a relatively far out-of-the-money call, it was determined that the call for this position should be at the money to minimize overall risk of utilizing leveraged ETFs.

3/24/2009 -- Bought 100 TNA @ 17.545
3/24/2009 -- Sold To Open 1 TNA April $17.50 Call @ 2.2


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $1754.50


Downside Coverage: 12.54%
Possible Max Upside: 13.75%

Annualized Max Upside: 165%

Initial Transaction - General Electric (GE)

A position in General Electric was established on March 23, 2009. This is essentially a continuation of the position that was held last month, restarted after the previous options expired. As opposed to the previous month, this call was established out of the money.

3/23/2009 -- Bought 100 GE @ 10.185
3/23/2009 -- Sold To Open 1 GE April $11 Call @ 0.47


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $1018.50


Downside Coverage: 4.61%
Possible Max Upside: 12.76%

Annualized Max Upside: 153.17%

Update Transaction - Direxion 3xFinancial Bull (FAS)

The position in Direxion Financial Bull 3x was continued after expiring out-of-the-money in March. The new profit/loss projections are below:

3/18/2009 -- Bought 100 FAS @ 5.58
3/18/2009 -- Sold To Open 1 FAS March $6 Call @ .21
3/20/2009 -- March Option Expired
3/23/2009 -- Sold To Open 1 FAS April $6 Call @ 1.25


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $557.50


Downside Coverage: 26%
Possible Max Upside: 35%

Annualized Max Upside: 210.1%

Options Expiration - March 2009

The Covered Calls Investor Portfolio contained a total of 7 positions with March 2009 expirations, and 5 positions either with a Non-March expiration or no current covered call. The 7 positions with March expirations had the following results:
- 5 positions (GE, VLO, CAT, AA, AFL) closed in-the-money. The calls were exercised and the stock was sold. Quite a few of these investments ended quite a bit in the money. The annualized gain/loss results (after commissions) were:

General Electric (GE) => +91.3%
Valero Energy Corporation (VLO) => +81.97%
Caterpillar (CAT) => +63.6%
Alcoa (AA) => +57.1
Aflac (AFL) => +67.1%

- 2 positions in the portfolio (FAS and X) ended out-of-the-money. New calls will most likely be established on Monday, barring a large market decline. Both of these positions sitll offer quite large time premiums, and it is therefore the intention of this investor to sell slightl out of the money calls.

The positions in the portfolio which did not have March expirations include AT&T (T), Morgan Stanley (MS), Foster Wheeler (FWLT), Mack-Cali Realty (CLI), Johnson Controls (JCI). These positions are the following:

AT&T
200 Shares Owned
1 April $26 Call
100 shares are currently not covered

Morgan Stanley
100 Shares Owned
1 July $10 Call

Foster Wheeler
100 Shares Owned
1 August $12.50 Call

Mack-Cali Realty
600 Shares Owned
1 April $17.50 Call
1 July $22.50 Call
400 Shares Not Currently Covered

Johnson Controls
100 Shares Owned
1 April $10 Call


After Mack-Cali Realty and AT&T pass their ex-dividend dates, out-of-the money calls will be sold.

Initial Transaction - Direxion 3x Financial Bull (FAS)

A position in Direxion Financial Bull 3x Shares was established on March 18, 2009. This covered call purchase was simply to use the current volatility in financial share prices to make a quick profit, and if the etf did not end in the money, then a plan is in place to sell an at-the-money call on monday. This ETF returns 300% of the Russell 1000 Financial services index.

3/18/2009 -- Bought 100 FAS @ 5.58
3/18/2009 -- Sold To Open 1 FAS March $6 Call @ .21


The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $553.00


Downside Coverage: 3.8%
Possible Max Upside: 11.7%

Annualized Max Upside: 140.7%