Portfolio Update

Today was a profitable day in the market. All of the major indices moved up at least a percent or two and all of my commodity ETFs I watch also moved up, although not as strongly. Currently, all but my position in CVX went up. Overall, this still leaves me in the red for this cycle of investments. But because of today's move, I have been given confirmation that some stocks I have been watching are attempting to make bull moves.

In my previous post I announced that I was watching CEPH, GNW, MU, PCS, and S. Of these, I am making a play on one of them, MU. The kind of play I am making on it is a Covered Call. This type of play involves buying at least 100 shares of a stock and then selling a Call option against it. For me, I will be buying enough shares to sell the closest $9 Call against it. I chose $9 because that was the most recent resistance point it had reached.

If you have read any of my previous posts, you might have gleaned that I have no interest in holding non-dividend paying stocks, and that is still the case. In addition, selling the $9 Call doesn't do me any huge favors. My reason for this trade is to produce a little capital on a stock that has been oversold for a couple of weeks. The sale of the Call is simply to offset the commission expenses and set an exit point for collecting profits if it runs up fast. It is possible that MU will reach and break through the resistance since it only has 11 days until expiration. It is also possible that it will stall under the resistance for some time before moving in either direction. If it does happen to close under resistance by expiration, I will either sell another Call against it or cash out. That is my opinion, you can take it or leave it.

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