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Blog Owner Reviews Full Details Of His Covered Call Option Trades


A lot of articles are available on the investment topic of the Covered Call strategy. The Blog recently went much further by posting live trading examples, including real results of recently closed trades. Nothing was omitted, everything was revealed, warts and all.

These results of several trades of a very ordinary investor – not an expert – should serve as invaluable illustrations for all investors considering the pros and cons of the covered call strategy.

For example one of the postings described a recently closed trade of the Rent-A-Center, Inc (RCII) shares. It was a very good example of such trade that went wrong due to the untimely intervention of the Lehman Brothers saga and subsequent banking crisis. The example listed 500 RCII shares bought at over $23, went all the way down to near $12 during the Financial Market’s recent bleakest period.

The example also showed the importance of buying insurance by means of the put option strategy to protect capital. A put option was bought before the start of banking crisis. Subsequently, by means of a series of covered calls, the shares were eventually sold for $20. The shares were called away at an option expiry, a good example of option assignment. The shares were sold below market value due to the obligation imposed by the short call option, an element of covered calls. The share price of RCII was above $20 when the call option expired resulting in the RCII $20 option being assigned. The overall outcome of this trade which covered a period of over a year was a slight profit including the contribution of the put option insurance, even though the shares were bought for $23 and eventually sold for $20. As anyone can see, the sequence was very complicated, and that is exactly why the Blog provided all the trading statements of each trade, so following each step is so much easier.

For actual details and results of trades described please visit


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