August Born To Sell Newsletter

Below is the Born To Sell August newsletter. Topics discussed include retirement calculators, Apple Ex-dividend, and a list of popular covered call trades.

	Seller's Paradise Aug 1, 2012
Retirement Calculators Retirement calculators can be fun... Just enter some crazy values and you're an automatic millionaire waiting to happen, enjoying huge projected withdrawals after an early retirement. Rarely is it that easy. Is it realistic to assume you'll make 20%/year for the next 20 years, never have a down year, and have no increase in underlying expenses or tax rates? Probably not. Recently we came across a very thorough retirement calculator written by a devoted covered call writer. You can read about it and other retirement calculators in A Retirement Calculator For The Covered Option Writer. Apple's Ex-Div Date Next Week Apple's ex-dividend date is August 9th, and the company will pay a $2.65 dividend to anyone who owns the stock on the close of August 8th. So, if you want the dividend, own the stock when the market closes on August 8th. You can sell it the morning of the 9th and still get the dividend (although it won't be paid until the pay date of Aug 16). A better strategy, that combines covered calls with dividend capture, is to own the stock and sell a covered call with an expiration date later than the ex-div date (August 9th). Because AAPL trades weekly options, you could initiate a buy-write this Thursday (Aug 2nd) when the Aug 10 weeklys begin to trade. Buy 100 shares of stock and sell an in the money covered call (maybe 10 points in the money, but it depends on how bullish you are; and remember when setting the strike that the stock will open 2.65 lower on the 9th due to the dividend having been paid). You'll collect some time premium as well as the dividend in an 8-day trade. Born To Sell has as specialized search mode called Dividend Capture that is optimized for covered call trades just like (with ex-div dates prior to option expiration). Check it out under the Search->Dividends menu. When To Roll 'Rolling' a covered call position is the act of buying back the short call option you've already sold and then selling another one with a different expiration date or strike price (or both). It is an important skill to have in order to maximize your time premium capture. The key question is "When should I roll?" There is no single answer as it depends on your outlook for the underlying stock, whether there are any tax issues of assignment, your risk tolerance, if there are earnings coming up, your transaction costs, the bid-ask spread on the options, and the premiums being offered. One common reason to roll is when there is little to no time premium remaining in the option you are currently short. The whole purpose of shorting the call option was to capture time premium. Once it is gone, why stay short? Maybe if it has a few days to go and a few pennies of premium left you can just let it expire (especially if your transaction costs to buy it back are high). But if there are more than a few days remaining and you are trying to optimize the time premium per day you receive, then very often it's best to buy back the option that only has a few pennies of time premium and then sell another one that has more time premium. If you really want to maximize your time premium capture then you should be short the option that has the highest time premium per day at all times (but consider your transaction costs for switching too often). For example, if there was an option with 5 days remaining trading at 15 cents then it has 3 cents per day of time premium. Maybe the same underlying stock has another option with 35 days remaning selling for $1.40 (same strike). That one has 4 cents per day of time premium remaining. But maybe there is an earnings announcement before this 35-day option expires -- more risk (which is why there is more premium). And what about capital gains/losses and tax treatment? Do you want the stock called away so that it becomes a realized gain or loss? Or is the stock in a tax-deferred account so it doesn't matter? Unfortunately, there is no single best answer on when to roll. But a tiny amount of time premium remaining in the option you sold is a pretty good place to start thinking about rolling. Born To Sell's Dashboard feature lets you see at a glance how much time premium remains in each of your positions (as as %, $s per share, or in absolute $s). You can sort by this attribute and then your most likely roll candidates will be on the left. And the Roll Me feature shows you 15 scenarios side by side so you can compare the option you are currently short with 14 alternatives... a real time saver, and premium maximizer. Free Covered Call Books Giveaway Like Born To Sell? Help us get the word out and you could win a free book on covered call investing, or an iTunes gift card: There are 8 ways to enter (Facebook, Twitter, Google+, etc). Full details on the Link To Us And Win page. Thanks and good luck in the drawings! MSFT And 3 Other Covered Calls For Aug 18 Expiration With 3 weeks to go until the August options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity): Rank Symbol Strike 1. MSFT 29 2. AAPL 600 3. MMR 13 4. FCX 31 (Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.) AAPL And Other Covered Call Watchlist Stocks Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity): Rank Symbol 1. AAPL 2. INTC 3. MSFT 4. JNJ 5. T 6. GE 7. CSCO 8. CAT (Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!) Want More Covered Call Goodness? Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from: Term Price Monthly $59.95 Quarterly $149.95 (17% discount) Annual $499.95 (31% discount) Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today! Happy Trading, The Born To Sell Team

Sell The Call does not have a position in any of the above stocks.

** Disclaimer** - Sell The Call is simply posting information. This is not a recommendation to buy or sell any of the securities above. Do your due diligence before investing as there is risk to all investments. Be sure to Like ourFacebook page, and follow Sell The Call's Twitter and Stocktwits pages.

June Born To Sell Newsletter

Here is the June newsletter from Born To Sell:

	Seller's Paradise Jun 1, 2012
Selling Covered Calls In May Was A Good Call On May 7 we published a blog article suggesting you sell in-the-money covered calls for the month or for the summer. This was based on the historically weak summer months for the S&P 500, as seen in this chart showing median returns by month for the last 25 years: Given last month's performance, the in-the-money strategy was the right call. Despite the drop in May, all 6 suggested trades (AAPL, CRM, LNKD, CRUS, GOOG, VHC) with expiration dates of Aug 18 or Sep 22 are still in-the-money, and will yield annualized returns of 15.9% to 24.8% if they stay in-the-money. To read the full article, please see Sell (Covered Calls) In May An Go Away. More Apple Income Many people make a living off of writing covered calls on AAPL. The at-the-money weekly options often pay annualized returns of 80% or more. Of course, writing at-the-money options increases risk should the underlying drop by more than the option premium received, as AAPL did for many people in May. The solution is to reduce your return expections and write in-the-money or deep-in-the-money options instead of at-the-money. In the last several weeks we've completed 3 cycles with this strategy: May 8: all 3 strikes called away for annualized returns of 25% to 53% over 5 days. May 14: all 3 strikes not called, but then on May 21 were re-written at the same strike and then succcessfully called on May 25 for annualized returns of 52% to 79% over 12 days. May 29: all 3 strikes called away for annualized returns of 21% to 51% over 4 days. You can read about the trades in May 8, May 21, and May 29 blog entries. Free Covered Call Books Giveaway Like Born To Sell? Help us get the word out and you could win a free book on covered call investing, or an iTunes gift card:    There are 8 ways to enter (Facebook, Twitter, Google+, etc). Full details on theLink To Us And Win page. Thanks and good luck in the drawings! MSFT And 3 Other Covered Calls For Jun 16 Expiration With 2 weeks to go until the June options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity): Rank Symbol Strike 1. MSFT 29 2. AAPL 585 3. CHK 15 4. INTC 26 (Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.) INTC And Other Covered Call Watchlist Stocks Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity): Rank Symbol 1. INTC 2. MSFT 3. AAPL 4. GE 5. CSCO 6. T 7. JNJ 8. F (Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!) Want More Covered Call Goodness? Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from: Term Price Monthly $59.95 Quarterly $149.95 (17% discount) Annual $499.95 (31% discount) Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today! Happy Trading, The Born To Sell Team Follow us: Facebook | Twitter or watch demos of Covered Call Tools (YouTube)

May Born To Sell Newsletter

Born To Sell has released its May Newsletter. The information is simply being passed on and is not a recommendation to buy or sell any of the securities mentioned.

	Seller's Paradise May 1, 2012
That's A Lot Of Nickels There are at least two ways go get a billion dollars: Start a nationwide photocopy business like Kinko's and charge 5 cents a copy. Be a high-frequency trader and execute millions of trades per year where your average gain is 5 cents per trade (not per share, per trade). The first is chronicled in the book Two Billion Dollars In Nickels, the second in our blog article on High-Frequency Trading. Turn Apple Into An Income Stream Recently we read an article on How To Turn Apple's Stock Into An Income Stream. The author, Rocco Pendola, makes several good points that we agree with: AAPL is a good stock for covered calls. Some people make a living just writing covered calls on AAPL. If you have an unrealized gain in AAPL (in a taxable account) and don't want the shares called away, you can buy back any in-the-money options you may have sold while they still have some time premium left. In addition to writing for SeekingAlpha, TheStreet.com, and others, Rocco publishes the Option Investing Newsletter, which contains specific trade analysis and recommendations. He has some quality ideas in that newsletter and it's worth checking out. AAPL Weekly Trade Speaking of AAPL, hopefully you caught our blog article on Apr 16 where we laid out 5 possible in-the-money covered calls as a 5 day trade using the AAPL weeklys. Turns out that all 5 trades finished in the black, with the biggest success yielding 58.4% annualized return. See the trade ideas in the Weekly Apple (AAPL) Trade blog article. Which Is Better: Naked Put or Covered Call? We are often asked about naked puts vs covered calls. Our advice to those who think one is better than the other is to check the profit & loss curves side by side (hint: they are the same if you use the same strike and expiration date). Now, there are a few differences between the two. The differences involve things like account permissions, commissions, dividends, margin, and interest. But if you are trading at a low-cost broker with reasonable account permissions and margin rules then the differences are so small as to not really worry about. They are basically the same trade. See the Naked Put vs. Covered Call analysis. ARNA And 3 Other Covered Calls For May 19 Expiration With less than 3 weeks to go until the May options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity): Rank Symbol Strike 1. ARNA 2 2. MSFT 32 3. AAPL 590 4. GE 19 ARNA has an earnings release on May 10, and MSFT has an ex-dividend date on May 15. (Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.) INTC And Other Covered Call Watchlist Stocks Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity): Rank Symbol 1. INTC 2. MSFT 3. AAPL 4. GE 5. JNJ 6. CSCO 7. T 8. XOM (Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!) Want More Covered Call Goodness? Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from: Term Price Monthly $59.95 Quarterly $149.95 (17% discount) Annual $499.95 (31% discount) Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today! Happy Trading, The Born To Sell Team Follow us: Facebook | Twitter or watch demos of Covered Call Tools (YouTube)

April 1 Born To Sell Newsletter

The following Born To Sell newsletter was sent to Sell The Call on April 1st.

 Free Money Printing Machine Offer

Born To Sell is pleased to announce that every new subscriber will receive a desktop-size money printing machine, for free! In addition, customers who sign up for a full 1-year subscription will receive a free high-speed money printing press:

 

To get your free money machine, visit the Free Money Machine Offer page.

23 Year Study On BuyWrite Index Performance

Asset Consulting Group recently released their analysis of 23 years of index option writing. The results show that writing covered calls increases returns and lowers portfolio volatility.

The study looks at several option-writing indices:

• BXM - CBOE S&P 500 BuyWrite Index
  writes 1 month ATM (at the money) covered calls on S&P 500
• BXY - CBOE S&P 500 2% OTM BuyWrite Index
  writes 1 month 2% OTM (out of the money) covered calls on S&P 500
• PUT - CBOE S&P 500 PutWrite Index
  holds T-bills and writes 1 month ATM naked puts on S&P 500

The study then compares those to their benchmark, the S&P 500. In all 3 cases the annual return (from 1988-2011) was higher while the volatility was lower:

And the covered call indices have higher annual returns over a variety of time frames:

See more data on our blog article BuyWrite Index Performance

Stock Broker Reviews

Barron's has published stock broker reviews for the last 16 years. Every year they offer up their ratings and reviews of top brokers, awarding up to 5 stars in several categories, including:

• Best For Long Term Investing
• Best For Options Traders
• Best For Frequent Traders

And a special section for cost-conscious investors:

• Best Low Cost Brokers For Occasional Traders
• Best Low Cost Brokers For Frequent Traders

You can see the 2011 winners in our blog article Stock Broker Reviews.

VVUS And 3 Other Covered Calls For Apr 21 Expiration

With 3 weeks to go until the Apr options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity):

Rank	Symbol	Strike
1.	VVUS	20
2.	GE	20
3.	MSFT	33
4.	JNJ	65

(Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.)

INTC And Other Covered Call Watchlist Stocks

Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity):

Rank	Symbol
1.	INTC
2.	MSFT
3.	T
4.	AAPL
5.	GE
6.	JNJ
7.	CSCO
8.	ABT

(Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!)

Want More Covered Call Goodness?

Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from:

Term	Price
Monthly	$59.95
Quarterly	$149.95 (17% discount)
Annual	$499.95 (31% discount)

Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today!

Happy Trading,

The Born To Sell Team

Follow us: Facebook | Twitter or watch demos of Covered Call Tools (YouTube)

Seeking Alpha article on JOTM Covered Call Ops

Seeking Alpha published an article by David Jonas using the strategy of covered call trading on just out of the money options. The stock referenced is Microsoft.

David Jonas - Profiting From Microsoft's Inertia

** Disclaimer** - Sell The Call is simply posting information. This is not a recommendation to buy or sell any of the securities above. Do your due diligence before investing as there is risk to all investments. 

New Born To Sell Newsletter

The following is the Feb 1 newsletter from Born To Sell.

** Disclaimer** - Sell The Call is simply posting information. This is not a recommendation to buy or sell any of the securities above. Do your due diligence before investing as there is risk to all investments.

A Triumph Of Strategy Over Hope Goldman Sachs released a recent study that shows how writing covered calls can help you beat the market. Conclusion: "Writing covered calls would have increased performance smartly over the past five years," Their study Beat Your Benchmark states, "The key to significantly outpacing the market seems to be selling calls against large-capitalization stocks with high implied volatility (the critical part of an options price) during months in which the company isn't reporting earnings." Doing this, Goldman reports, "boosted annual returns by 5.39 percentage points from 1996 to 2011, and reduced risk." To read more about the study along with 13 stocks to consider now, see A Triumph Of Strategy Over Hope on Barrons.com. Covered Call Screening Ever wonder how many covered call candidates exist at any given time? While it varies from day to day, normally there are around 230,000. Too many to look at individually but if you use a covered call screener you can reduce that number to something much more manageable. Quick example: To see the rest of this funnel and how it reduces the 16,537 candidates down to 38, please read our blog entry on Using A Covered Call Screener. Example trades for each of the final 38 candidates are listed, too. High Yield Dow 30 Industrials One popular screen to look for high yield (but relatively stable) stocks for covered calls is to sort the Dow 30 industrials by dividend yield, and then look for the lowest P/E ones near the top of the list. The idea being that you will be buying high yield value stocks. We did this in early January to find 8 stocks with low P/Es and high yields. Chevron (CVX) came out on top, and makes a good covered call candidate. To see the other 7 stocks, see our article on High Yield Stocks. Conservative vs Aggressive Use Of Covered Calls Despite being a conservative strategy, covered calls can be used aggressively if an investor wants to do that. While the conservative investor seeks large cap dividend paying blue chips that do not have earnings before expiration, the aggressive investor chooses momentum (and other high beta) stocks, trades on margin, and seeks the highest annualized returns possible. While the aggressive plan is great when it works, many investors have been burned at some point by following that strategy. For some conservative trade ideas, see our article on Writing Covered Calls For Consistent Profits. DMND And 3 Other Covered Calls For Feb 18 Expiration With just over 2 weeks to go until the Feb options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity): Rank Symbol Strike 1. DMND 36 2. X 30 3. GE 19 4. MSFT 27 (Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.) INTC And Other Covered Call Watchlist Stocks Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity): Rank Symbol 1. INTC 2. MSFT 3. AAPL 4. T 5. GE 6. JNJ 7. F 8. BAC (Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!) Want More Covered Call Goodness? Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from: Term Price Monthly $59.95 Quarterly $149.95 (17% discount) Annual $499.95 (31% discount) Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today! Happy Trading, The Born To Sell Team Follow us: Facebook | Twitter or watch demos of Covered Call Tools (YouTube)

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