NYSE Euronext (NYX) Covered Calls

I sold four covered calls on three stocks today, the first day after expiration.  In my IRA I covered my positions with October calls on BAM, BA and NYX.  I sold BAM out of the money (OTM) and BA and NYX in the money (ITM).  In my taxable account I sold one NYX October 75 call OTM while NYX was trading at 73.56.  I received $449.25 after commissions. 

Every month I seem to be chasing NYX’s fall with covered calls.  I’m close to break even again with today’s calls, but I’m growing very wary of this game.  That’s what made me sell ITM on my IRA shares.  I’d like to lessen my exposure to NYX and if I had written deeper in the money this last time around I’d still have the shares and another few hundred dollars.  I could see NYX recovering still, but I have to stick to my model where I don’t worry about where I’ve been with the stock in the past, but make my decisions on where it is now and my beliefs in where I think it will be in the short term.  Certainly I could make more if I sold farther OTM, but I lock in more profit the way I’m working it now. If the shares are called away (assigned) I will be able to use the money I have tied up in owning the shares for more naked puts on other stocks.  My cash flow improves by writing closer to the money while I give up potential longer term gains.  While it sucks to “leave money on the table” when writing calls so close to the current trading price of the underlying stock, I have to remember that not writing ITM leaves money on the table when a stock falls.

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