We hold a tracking position of 500 shares with a 127.62 cost basis and are short five August 5 137.00 calls against them for 2.50. I will adjust the option price once I’ve heard from subscribers who rolled the covered write on Friday as advised. We rolled to a lower strike in order to gain more protection against the prospect of more weakness over the near term. Based on the pattern shown, the stock (ETF) could fall to as low as 135.27. If it rallies instead, our covered write would cap profits above 139.50, but we can deal with that if and when we need to. Newbies eager to defray the cost of a Rick’s Picks subscription should follow my touts for this vehicle closely, since my goal is to provide relatively easy trades in TLT as we augment our long-term bullish position over time. _______ UPDATE (July 27, 9:15 p.m. EDT): Cover the calls on the opening with an order to buy them at-the-market, since TLT’s strong rally yesterday has put a 148.50 target in play. _______ UPDATE (July 28, 10:35 a.m): The stock opened at 139.78, allowing traders to cover the calls for 2.90 — 40 cents more than we paid for them. This will effectively raise the cost basis of the 500 shares we still hold to 128.02. Do nothing further for now.
