Establish Covered Calls on Bonds

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.

UNDERLYING ETF:  TLT   

DESCRIPTION: iShares Barclays 20+ Year Treas Bond

TRANSACTION TYPE: Established March $119 Covered Call

TRANSACTION RATIONALE:  As discussed  here another covered call candidate is the long term bond ETF. As Fed. meeting minutes noise seemed to drive the price of this ETF up, CCI took that as an opportunity to re-establish a covered call position on the position.

TRANSACTION DATE: Thur.  Feb. 21, 2013

Action: Sell to Open

Exp. Date: Mar. 16, 2013

Strike: $119

Price: $0.65

 

Net credit: $0.61/contract after commission