We hold a long-term position of 200 shares with a 120.36 cost basis and implied profits of $1200 based on Friday’s close. We are also short two June 30 127 calls for 0.90 that we narrowly missed covering for 0.20 last week. Let this covered write ride for now, since it gives us downside protection with very little upside risk. Our maximum gain of $180 would come with TLT trading between 127.00 and 127.90 when the options expire. We will continue to work the position, increasing its yield over time by buying additional shares in timely fashion, and by doing more covered writes whenever the odds look juiciest. I would encourage relative newcomers to Rick’s Picks to monitor my TLT touts closely, since I consider this vehicle a source of easy profits, even for trading novices. Trades like this one are the best way I have of returning to you the money you paid to subscribe. This is a very long-term play, since I expect the T-Bond futures to go much higher in the years ahead.______ UPDATE (Jun 22, 11:12 p.m. EDT): TLT has been stronger than I’d anticipated, but we’ll leave the covered write alone, since the rally is approaching a 128.40 Hidden Pivot resistance (click here to see it) that seems likely to show some stopping power. _______ UPDATE (Jun 28, 1:07 a.m.): Bid 0.20 to cover the calls, day order. If it goes unfilled, re-enter the order on Thursday, but lower the bid to 0.15. _______ UPDATE (Jun 28, 10:08 a.m.): The calls have traded as low as 0.23 this morning, so I will consider them covered. Since we originally shorted them for 0.90, this will effectively lower the cost basis of our 200-share long-term position to 119.71. With TLT currently trading for 126.10, that implies a $1278 gain so far. Continue to hold the position. We’ll do more covered writes in the future as TLT embarks on a massive bull leg to 150 and higher._______ UPDATE (Jul 3, 7:29 p.m.): Well try to augment our position with a counterintuitive entry exactly like the one shown (see inset). Use a buy-stop limit to acquire 200 more shares if TLT touches 125.17 today without having gone any lower than 123.02. ______ UPDATE (Jul 7, 11:39 p.m.): TLT has headed lower after failing to trigger our bid. At the moment, it looks bound for a minimum 121.92 (60-min, A=124.65 on 7/5). _______ UPDATE (Jul 10, 7:49 p.m.): Bid 122.02 for 400 shares, stop 121.82. The stop-loss is a little wider than usual because there’s an alternative Hidden Pivot target where TLT could conceivable turn that is nine cents above the one at 121.92 given above. If the position goes in the black, plan on closing out 200 of the shares at 122.78. We continue to hold 200 more shares with a cost basis of 120.36._______ UPDATE (Jul 11, 8:29 p.m): Cancel the bid for now lest more chop like we’ve seen over the last three days drive us batty.
