Sold CMI Covered Calls

I’m starting to face reality and realize that the world’s economy isn’t coming back in a snap.  That means I’m selling some covered calls at lower strikes than I was planning to.  If we do get a bear market rally, I figure I should sell while up.  These lower strike covered calls will force my hand.  If we don’t rally that much I’m at least taking in some extra cash in the meantime.  While CMI was trading at $22.13, I sold to open two CMI December 25 covered calls (CMILE) for $1.10 each and received $208.50 after commissions.

I’m already short two CMI December 35 calls (CMILG).  Those are now naked calls since I’m only long 200 shares.  Even if CMI starts to climb, I still have $10.00 cushion in between the two sets of options.  I don’t think CMI will climb as high as $35 in the next few weeks, but will keep watching it closely.  Since I sold the CMI calls near the open of today it and my other stocks have recovered and even turned positive.  That puts me back in the wait and see mode as I want to spread out my covered call sales over more than two to three days.