Teva - Covered Calls

CCI's position in TEVA has not moved very much over the past months. Today it jumped nearly 7%.  It seems the market likes the idea of a new CEO!  In the longer term, a new CEO could be a good change agent to help drive this stock towards my original target price near $50.  However, in the shorter-term I suspect that today's positive reaction might be short-lived. It usually takes several quarters for a new CEO to have an impact on the company.

Hence, this morning CCI sold Jan $42.50 calls against one lot of the stock in the portfolio for a credit of $.80. The stock continued to move up during the day and an investor could have gotten a much better price or moved to the $45 strike.  Two scenario's 

•  Today's positive move was indeed an over reaction, and the stock will pull back in the short-term.  In this case CCI will look to harvest some premium and potentially roll this same call out t a future month
• The stock stay here or rises.  In this case one lot of share will be called away at an effective price of $43.30, and the other two lots in the portfolio will continue to enjoy the ride.