On 12/31/2007, the following was done:

“Bought 4 blocks of C at 28.96, and wrote 400 Jan strike 27.50 at 2.12/contract for intrinsic value of .66/share times 40,000 shares.  The intention behind this strategic play is similar to the one I did on INTC earlier– To have my underlyig shares taken away by Jan option expiration.”
On 1/23/08, the follwing was executed:
“Because C closed below 27.50 when Jan options expired, I pocketed  the entire premium of 2.12/contract times 400 contracts.  Today, I wrote 400 Feb Strike 27.50 at .59/contract.  While I’m not impressed with the premium, it’s bettern than simply holding the underlying shares alone without earning anything.”

Today, I covered the 400 Feb strike 27.50 calls at .08/contract for a .51/contract gain.  I could have allowed the remaining .08 to decay to maximize further gains.  However, I wanted to hedge with a lower Strike becuase I believe the stock is momentarily under tremendous pressure.  That said, I wrote 400 March strike 25 calls at 2.42/contract.  The shares trading at a current 26.12, the calls provide me with an intrinsic value as well as a hedge of 1.30/share.  Even if I allow my shares to get called by March expiration, I have made plenty from the Jan and Feb calls.

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