1. BIDU: (options spreads) bought to cover BIDU Sept 2011 $105 strike and sold Mar 2012 $110 strike for $3/sh credit.  The net gain on this trade is ($3 + $5 of strike difference) for a total of $8/sh gain.  $110 for BIDU is well below its 200 day SMA (which is $129), therefore it’s very safe.  $8/sh gain divided by the maintenance requirement = ~21% gain in 6 months (or 42% annualized).
2. SLW, Sept $33, rolled up to Oct $34 for a credit (gain) of $0.75/sh.  The net gain for this trade is monthly return of 17%, if SLW price stays above $34 by Oct. 22.
3. Using the credit due to the roll ups, I wrote more covered calls of NFLX (short call Oct $175, net cost $159.42/sh).  Monthly return 19.1% at the current price of $170.81.  If NFLX goes above 175$ by Oct 21, my return is 33% in 1 month.
4. LVS: rolled up Sept $40 to Dec $42 call for a net profit of $2.6/sh and a return of 20.6% in 3 months or 82.4% annualized.

Bought FFIV at $73.61, sold FFIV weekly call at $75 for $2.11.  Net cost: $71.5/share.

Bought MCP at $51.72/sh and sold calls (strike 52.5, expires this Friday) for 1.57/sh.  Net cost: $50.15/sh.

You may wonder where do I have the extra money to keep adding new positions.  Well, every week, when I roll up options or when existing options expire, I receive income.  I use this income to add new positions.

• SLW.  I bought SLW 2 days ago and wrote calls with a strike of 39.  Today SLW is above 39.  I like SLW and want to continue to hold these shares.  So to prevent my SLW shares to be called away, I bought back the options (strike 39, cost $1.6/share) and sold equal amount of contracts of SLW options with a strike at 39 (profit: $2.13/sh) and expiring next week (this is called a calendar spread).  Net profit for this trade: $2.13 – $1.6 = $0.53/share (or 4.9% return on investment in 1 week).
• I also rolled up my earlier SLW covered (strike 38) to next week.  Net profit: $0.35/share.
• FFIV.
• Added more FFIV shares using the profit income due to roll ups (one example of how to increase your portfolio size).
• MCP.  I rolled up MCP options (strike 50) expiring today to Oct (43 days to expiration), to a higher strike (52.5).  Net credit is $1.15/sh.  Plus the $2.5 higher strike (higher profit, if MCP stays above $52.5/sh by Oct expiry).  Net profit of this roll up is $1.15 + $2.5 = $3.65/sh.  The total profit / margin requirement x 100% =  23.17%.  In other words, if MCP price is above $52.5 by Oct. 22,  2011 (43 days from today), my return is 23.17% in 43 days (or 197% annualized return).
• BIDU.  I also rolled up BIDU.

SLW: Cost $34.  Call strike: 36, exp: Aug 12th.

Expecting a rebound from such dramatic downfall.

How do I determine which one I should do?  Here is my

• For the Jul $100 calls, I rolled up (i.e., bought back the short calls and sold simultaneously another call): bought FFIV Jul $100 call and sold Aug $100 calls for a profit of $2.5/sh.  [$2.5 times x number of my contracts x 100 (each contract has 100 shares of underlying stock)] / [maintenance requirement (i.e., the cash I need to have in my trading account for this investment)] x 100% = 8.2%.  My return is 8.2% in 1 month (or annualized 98.4%). My strike price is 10% in the money (pretty safe).  This is a safe and yet quite profitable investment.  So I decided to roll up.
• For the Jul $97.5 calls, I rolled up (bought July $97.5 call and sold to open Oct $100 call) with a profit of $3.1/sh.  This trade not only gave me $3.1/sh cash in my account, but also raised my strike from $97.5 to $100.  So my net profit is $3.1 + $2.5 = $5.6/sh.  My return in 3 months (expiring in Oct) is 18.38% (or annualized return of 73.52%).  Again, the $100 strike is 10% in the money, i.e., even if FFIV drops from the current $112/sh to $100/sh in 3 months, I’ll still make a 18.38% return.  This is a good deal, so I did it.  Please note that I increased the strike price from 97.5 to 100.  I did so b/c I anticipate the stock market to enter a post-summer bullish phase until at least the year end.  Why did I choose Oct expiration? This is because when you increase your strike, you’ll have to pay more to buy back than to sell open.  If FFIV falls below your strike, that becomes your real loss.  So one lesson I learned is that I (almost) never pay out of pocket to roll up.  I chose Oct expiration because the roll up produced a net premium into my account.

The above case shows how I use the roll up technique to deal with a major problem of covered call that most newbies don’t know how to deal with: capped maximum return.  With roll up, there is no capped maximum return on covered calls.  You can continue to roll up the expiration date and/or strike price to keep up with the rising stock price.

It’s obvious that MCP gives the highest profit.  Plus other factors, I sold OPEN and entered a covered call of MCP.

1. OPEN.  I sold a portion of OPEN at ~80.30 (broke even) to provide funds for FFIV position.  I intend to sell calls against my OPEN shares at the strike of 80, exp. Oct. 2011, for $7.25/sh (Friday’s prices).  This will effectively bring down my OPEN cost further to 73.05.  $7.25/$22.32 (maintenance required for each share of OPEN) = 32.5% (return in 4 months).
2. FFIV.  I also intend to sell Oct 2011 105 call at $8.4 (Friday’s close).  I wrote a covered call (cost $102.98).  For this batch of purchase, if I can write a call to replace the expired call for $8.4/sh, it will bring my cost down to $94.58.  $8.4/$29.16 (maintenance requirement for each share of FFIV) = 29% (return in 4 months).  I am still net short FFIV.  I have short calls at 97.5 and 100.  I’d like to add more short calls at $105.
3. SLW: After the options expired, I am left net long SLW (cost $34.7).  I intend to sell call at Dec. $33 for $3.2.  This will bring down the cost to $31.5.  The ROI of this trade is 10.5% (for 6 months).