CAT – Covered Call

Per my plans in my earlier post, I bought Caterpillar, Inc (CAT) in my IRA for 77.19 and waited briefly before selling a covered call at 1.85.  I received $174.25 after commissions.  I was planning to get in close to the market open, but once again my coworkers wanted me to work instead of trade and I was stuck doing “stuff”.  Once I found the time to make the trade CAT was up a dollar.  I hesitated and watched it climb some more before I pulled the trigger. I have a feeling I bought near the day’s top.

Checking the updated option premiums I decided to sell an OTM covered call and hope for some growth which CAT should find.  Aside from Jim Cramer’s recomendation, CAT’s p/e is relatively low from a historical perspective and it has a large exposure to international markets.  Both of those are key factors for me since I’m still wary of the US’s growth in the short-term.  In addition, schaeffersresearch.com rates CAT 6 out of 10.

On another unrelated note, NYX is still climbing, but is banging its head on the 50 day moving average at 88 and is off its highs of the morning.  I’m riding out my June 90 covered call as long as possible before buying it back.  Once NYX crosses that possibly magic line, I’m likely to become a bigger bull on it.

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