Tuesday, March 19, 2013

Cyprus "Events" = Time for TLT Covered Calls

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page.

DESCRIPTION: iShares Barclays 20+ Year Treasury Bond

TRANSACTION TYPE: Established Apr $119 Covered Call
TRANSACTION RATIONALE:  As discussed  here another covered call candidate is the long term bond ETF.   With the Cyprus banking system making the US banking systems look good, and EU dysfunctional bureaucrats making US bureaucrats look like the picture of rationale, stability the US bond market is getting a "safe haven bounce".   CCI used this situation to re-established a covered call position of this bond etf as shown below. 

TRANSACTION DATE: Tues.  Mar. 19, 2013

Action: Sell to Open
Exp. Date: Apr. 20, 2013
Strike: $119
Price: $0.81
Net credit: $0.76/contract after commission

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