He’s happy, healthy and celebrated last night with his daughter, Susan (my wife) and eight close friends. He’ll easily make 100.
In light of oil spills, a lousy economy, two stupid wars, a drug epidemic and sundry other world nasties, there is joy and happiness in the world. The sun is shining today. Futures are up a little. Be happy we’re alive.
Baby steps in covered calls.I bought 200 BHP at $66.09. I sold two $65 covered call contracts for $7.01 for January 2011. BHP closed last night at $67.47. It will have to go to $72 for the call option to be worthwhile. Maybe it will. Maybe it won’t. It probably won’t. 80% to 90% of options expire worthless. But, so far, I’m in the money. I have the money from selling the options and my BHP is up a little.
The worst that can happen to me is that BHP tanks. If it begins to tank, I can do something — namely buy back the options I sold. As January gets closer, my buyback will be cheaper than $7.01. In short, there is a way of managing this process that has some appeal over “Buy, Hold and Pray.”
Curiously, now BHP has risen a little what I could get for selling a covered call has risen. Yesterday I saw $9 for a January $67.50 call. I’m thinking of doing another two contracts. (Each contract is 100 shares.)
Your thoughts?
The oil spill and our president.I don’t understand the obsession with punishing BP. I don’t understand our President’s lack of attention to plugging the leak. Where are the on-the-ground experts? Where are the solutions? Where’s the defense department? Why not blow it and bury it in rubble?
What our President hasn’t figured is that BP is a deeply dishonest company. This well is the biggest and most successful deep water oil well ever drilled. BP sees it as a huge coup. The mess is collateral damage. BP doesn’t want to shut it down. BP wants the oil. That’s why they’ll futz around until August or September (or whenever) with drilling a “relief” well. That’s why they concentrate on collecting oil that ‘s spilling, not stopping the spill. They’re proud of the hole.
The fact that our law professor president hasn’t figured this out is ultra-depressing.
Everyone over 50 needs a shingles vaccination.But the vaccine has a long waiting list. I don’t know why. Get your order in now with your doctor.
Computer stuff:
+ I’ve given up on converting to Windows 7. Too much re-learning. Too much time for too few benefits. Stick with XP for now.
+ I hate Office 2007. I haven’t looked at Office 2010. I bet it’s even worse. But, increasingly I receive Office files in the stupid new format — docx in Word and xlsx in Excel. Happily Microsoft provides a free “Office Compatibility Pack for Word, Excel, and PowerPoint File Formats.” You can get it for free here. Be careful, the file is huge.
+ I really like Mozilla’s Firefox as a web browser. I have added three “plug-ins” — Showcase, Screengrab and MeasureIt. You can get all three from here.
Harry Newton,who was asked at a recent charity event how he could play aggressive singles tennis at his age for 2-3 hours each day? I don’t know the simple answer. I guess it comes down to progressive conditioning. Just piling on more and more hours. Not thinking there’s a limit. It seems there are few limits to what you can ask of your body if you treat it sensibly and get enough rest.
Hi Harry! Congrats on your first covered call sale. I'm not sure that your statistics on what percentage of covered calls expire worthless are correct. I took a seminar at the CBOE last year, and they said that it was more like 1/3 expire “out of the money” (worthless to the purchaser), 1/3 expire “in the money” (and thus are exercised, resulting in the purchaser of the calls calling away the stock at the strike price), and 1/3rd are bought back by the seller/market maker and thus “closed out” prior to expiration. My first thought upon reading that you sold calls was — wow, January is a long time from now. It is true that you get a much higher premium for those longer dated options — the option buyer is paying for that time value or “theta.” However, you are sort of locked in now until January. If you sell more contracts, may I consider looking at closer in months? The premiums are lower but the turnover is faster and generates income without long term commitment. I like to sell calls on Fridays when the market is up. You get some automatic price deterioration over the weekend with the loss of two days' time. Best of luck!
Firefox is my favorite browser because of the plugin AdBlock. A new plugin I am liking is PriceBlink.
Dave Jim, have you hooked up your Mac Mini to your HDTV? If so, how does it look?
Hi Harry. I am sure you get this everyday… why don't you just buy a Mac and drop Windows? If you are hesitant to let go, you can just install VirtualBox (for free) and install WXP for those must-have apps that will only run in Windows. I was hesitant to convert, but once I did my life improved. Now I own two Mac Airs, one MacBook Pro, two Mac Pros and one Mac mini. All work like a charm. I am what you would call a “power user”.. Macs are just better. No pain. Dave.
Dave-I took the pluge last week and bought a PowerBook-not cheap but its pretty cool trying to learn it all.
Logic prevails in favor of the Mac.There are irrational reasons to do what I'm doing, including lack of time, or more correctly stated different priorities. (The switch over for me would be time consuming.) Ultimately logic will prevail. Irionically, I do have a MacBook Pro 15″ and it is a beautiful machine.