Stock Market: Options (Calls)

Over the next year I will be tracking my sons investments on how to make money in covered calls. I will discuss each of the purchases, why we made the decision and then track the results. The intent is to provide a written record for learning as well proving that you don’t need a lot of money to start out investing. You can slowly grow your investment overtime. We will be starting out with $3000.00 and attempt to make a return of $1000.00 following some basic rules.

Rule 1: Stock is trading is a stable pattern for at least 2 months.

  1. Rule 1: Stock is trading in a stable pattern for at least 2 months.
  2. Rule 2: Return on investment is 5% if call is 30 days out.
  3. Rule 3: Stock is in the bottom 25% of its trading cycle.
  4. Rule 4: There are 2 additional months of calls after the intial purchase.

January Buys:

  • Cash $3000.00
  • Buy 100 Shares of XNPT for 8.91: Total $891.00 dollars Fee: $1.00
  • Sell 1 Call XNPT 22Jan11 9 Call @ $.59: Total $59.00 Fee: $1.00
  • Cash $3000.00 – 891.00 + 59.00 – 2.00 = $2166.00
  • Estimated Cash Value on 25Jan11: $2166.00 + $900.00 = $3066.00

Destiny or Free Will

A friend and I were having a discussion on whether a person is ruled by destiny or one is ruled by free will. This conversation lasted for about an hour with both using various arguments to express our opinion. I will not deny that the conversation did take on a theological philosophy.  My position was that I refuse to believe that I am a puppet on string and that my fate is sealed from the moment of my birth and my life is a script that I must play it out for the amusement of others. My life and my fate are mine and my choices are mine. These are to allow me to learn and improve my spiritual self. My friend argued that ones destiny is understand at birth and it was the individual’s responsibility to fulfill that destiny. This destiny is not always one of choice but must learned but everyone has a purpose.

After the debate, conversation, and discussion concluded my friend followed up our conversation with the following email. I have included here with the person’s permission.

In light of our conversation, I thought I would share this with you.  [My family and I] had been watching a DVD series on the Revolution (my daughter is particularly fascinated with this period in history and knows a great deal about it.)  We were discussing George Washington and his person and character when I was reminded of this story.  I looked it up and, albeit a website with an agenda, the historical information is accurate.  I thought that it would tie in with what we were discussing at rehearsal. 

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God’s hand can be seen protecting Washington this whole time. Because he was busy going back and forth across the battle field, completely exposed. Carrying out General Braddock’s orders. One soldier observing Washington, stated:

“I expected every moment to see him fall. Nothing but the superintending care of Providence could have saved him.”

Indians testified later, that they had singled him out, but their bullets had no effect on him. They were convinced that an Invisible Power was protecting him. Washington had two horses shot out from under him. Had four bullet holes in his coat. Yet he had been untouched by bullet, bayonet, tomahawk, or arrow. Every other mounted officer, had been slain!

Eventually, Braddock was mortally wounded in the side, and fell. When this occured, all the british troops fled in confusion. Washington gathered up what was left of the Virginiamen, barely 30. The injured General, and covered the retreating british, leaving all the baggage, weapons, provisions, cattle, horses, behind for the enemy to plunder. General Braddock died three days later.

It was the most lopsided battle in American history. 714 British soldiers had been killed, 37 wounded. 26 officers out of 86 were killed, and 37 wounded. Only 30 men, and 3 officers were killed, of the French and Indians!

Upon Washington’s return to Fort Cumberland (120 miles from the battle scene), He wrote a letter to his mother, to alay any fears she would have, as news of the rout had preceded them. On the same day (July 18, 1755) he also wrote to his brother, John A. Washington:

But wait, it gets even better. 15 years later, an old respected Indian Chief, sought out council with Washington, when he heard that he was in the area. Through an interpreter he explained that he had set out on a long journey to meet Washington personally, and to speak to him about the battle 15 years earlier. He said:

“I am a chief and ruler over my tribes. My influence extends to the waters of the great lakes and to the far blue mountains. I have traveled a long and weary path that I might see the young warrior of the great battle. It was on the day when the white man’s blood mixed with the streams of our forest that I first beheld this chief [Washington]. I called to my young men and said, mark yon tall and daring warrior? He is not of the red-coat tribe–he hath an Indian’s wisdom, and his warriors fight as we do–himself is alone exposed. Quick, let your aim be certain, and he dies. Our rifles were leveled, rifles which, but for you, knew not how to miss–’twas all in vain, a power mightier far than we, shielded you. Seeing you were under the special guardship of the Great Spirit, we immediately ceased to fire at you. I am old and soon shall be gathered to the great council fire of my fathers in the land of shades, but ere I go, there is something bids me speak in the voice of prophecy. Listen! The Great Spirit protects that man [pointing at Washington], and guides his destinies–he will become the chief of nations, and a people yet unborn will hail him as the founder of a mighty empire. I am come to pay homage to the man who is the particular favorite of Heaven, and who can never die in battle.”80 years after this battle, a gold seal that belonged to Washington, that bore his initial’s, was found on that very field, where he had been moving back and forth on horseback, relaying the orders for Braddock, amidst the hail storm of bullets. The gold seal had been shot off of his body, by a bullet!!

 I am convinced that George Washington was the right soul at the right time for the right job.  And I truly think that part of what makes great individuals so great is that, somewhere inside of them, they know this to be true.  They, too, feel divinely led to their purpose.  There is a sense of some greater impelling force that guides them throughout their life.  I also believe, in a lesser extent, that we all have that same potential.  It’s really dependent on how much we obstruct it or let it flow through us.  But I have rambled too long.  I thank you for the opportunity to expound upon this subject…something of which I, obviously, never tire.

 ”As I have heard, since my arrival at this place [Fort Cumberland], a circumstantial account of my death and dying speech, I take this early opportunity of contradicting the first, and of assuring you, that I have not as yet composed the latter. But, by the all-powerful dispensations of Providence, I have been protected beyond all human probability or expectation; for I had four bullets through my coat, and two horses shot under me, yet escaped unhurt, although death was leveling my companions on every side of me!”

After reading my friends email several times to digest the contents, I realized that the discussion was a draw. That both freewill and destiny are linked. Every person has the freewill to choose a path to follow. That path may lead to ones destiny or may not that is the purpose of freewill. The choices are not always good but are not always bad. However, I don’t believe that you get only one chance to achieve your destiny. In life there are many freewill choices and some will detour you for a while while others will put you back on the path to destiny. In the end it is the individuals choice or freewill to live up to their destiny which means many people take their last breath on earth never truly understanding the meaning of their life.