Sold long calls on Gigamedia

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.

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Covered Call Option Sold

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.

Option Expiration Week

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: Summary for SILVER WHEATON CORP

SLW: Summary for SILVER WHEATON CORP – Yahoo! Finance

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.

GigaMedia on the way up

As I hypothesized 10 days ago, Gigamedia, GIGM, has started a run up prior to earnings release on May 22.

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.

GigaMedia to Report First-Quarter 2007 Financial Results

GigaMedia to Report First-Quarter 2007 Financial Results on May 22: Financial News – Yahoo! Finance

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.

Expiration Day

I have 2 calls expiring today: The $12.50 on SLW and the $10 on DYN.

I bought Silver Wheaton SLW at around $10.60 and consider it more of a longer term holding. I can sell the $12.50 calls and earn a couple of percent a month while waiting for it to go up. I believe this company has excellent longer term prospects. They will be releasing quarterly earnings next Thursday.

A week ago I thought my Dynegy DYN position would be called away. I purchased the stock a few weeks ago at $9.72 and sold the Apr $10 call. The stock moved nicely to above $10 but has fallen back the last few days to $9.65 right now. Option premium on the $10 call is about 3% per month after commissions, so I would like to sell a couple before the stock is called away. They have an earnings release on May 8. I am a little nervous about this stock due to the recent pullback, time will tell.