Last week I bought some Sep $10 calls on Gigamedia GIGM ahead of todays earnings release. The earning came out OK and the stock went to $12+ and I sold my calls for $2.55 this morning. Nice to make a little money in this market.
While I was on vacation the call I had sold on Silver Wheaton SLW had matured out of the money. I was able to sell the August $12.50 call for $.55 for 57 days. This is a 4.7% return if uncalled.
I bought 100 shares of SLW in February for $10.56 and have sold the $12.50 call 3 times for a total of $103.20 in option premium after commissions. The shares are currently trading around $12.
This is the type of trade I am most interested in at this time. A company I really like for the growth prospects, yet I can earn another 20% per year in option premium.
I only have one option expiring this week, on Silver Wheaton SLW. It is quite a ways out of the money, so will expire uncalled.
I purchased SLW at about $10.50 and have been writing the $12.50 calls two months out for about 2.4% per option return if uncalled. This give annual option premium of about 14%.
I am very positive on the longer term prospect for this company, so I am trying to make some option premium until the price rises.
SLW is one of my covered call holdings. I wanted to post a few thoughts on this company stock.
The company buys silver from mines that produce silver as a by product at a preset price of about $4 per oz. and sell on the open market. The company appears to be growing, highly profitable with low overhead (I think there are 6 employees).
The stock has run up nicely the last 4 days to about $11.75. My sold option is the June $12.50. There should be a quarterly earning release the end of June, so a pre-release price runup would not surprise me. If the stock gets called away I will wait until after the earnings number before considering another buy-write.
I have a May $15 call written on the stock I own which expires May 18. My hopes are that if the stock is called away at expiration, the price will fall after the earnings release, and I can write another covered call on the stock.
This company seems to be doing very well and I am looking forward to seeing the most recent financials. The options carry a lot of time premium, so make for profitable covered call writes.
The options expire on May 19 so it will be interesting to see what the price does running up to the earnings release/option expiration. I own the stock covered by the $15 strike May call. The current price is about $14.30, but it was over $15 a couple of weeks ago. I will not be surprised if the price climbs to $15+ before the earnings come out.