In my choice for a stock I have chosen Encana (ECA) which trades on both the TSX and NYSE exchanges. 

As the chart above shows ECA has a floor around $17.50 per share and a top of $20.50
This quick look at the technicals help to determine where one should look when wanting to set entry and exit points.

Granted that Encana has had a horrible year last year with EPS being negative and the prospects of an declining price in its core products - Natural Gas. However in the first quarter ECA had improved it's EPS from the year earlier and was still a negative number and with the passing of the second quarter a far improvement in earnings at 99 cents per share. Additional discussion about ECA can be seen on my stock review blog, http://stockrenter.blogspot.ca/

With the base analyses done and it looks like Encana will survive I decided to buy 500 shares in my TFSA.
The transaction for ECA are as follows.

Jan 17, 2013 bought ECA @$19.15 per share, setting my Net cost to $9584.00

Jan 25, 2013 Sold to Open (STO) 5 (call) February 20 for 35 cent each, netting me $158.76

The February covered calls expired.

March 14, 2013 (STO) 5 (call) July 20 for $1.35 each, netting me $658.76

The July covered calls expired.

March 28th I collected a dividend of $99.95

June 28th I collected another dividend of $103.20

August 22, 2013 (STO) 5 (call) October 19 for 40 cents each, netting me $183.76

The amount that I have received to date is $203.15 in Dividends and $1001.28 from the covered call options for a total of $1204.43. As a percentage bases it works out as 12.57% not bad for this holding.

Next update will be when a trade either expires or if I buy it back and rewrite a new position.

If you have any questions drop me a note. Till then happy trading.











    

I have for quite some time planned on creating a blog about my TFSA and only focus on one stock at a time.

With the focus on stock at a time the goal is to generate the best return based on cash flow for the stock at the same time looking to add more if the price of the stock should fall.

Some rules:

1) The stock must be option traded.
2) One stock with a target sell price in mind “before buying it”
3) The company needs to be a medium to large company.
4) Buy more shares if price declines by 10% or more measured from purchase price.
5) Restrict the new buy to a “lot” vs an odd lot purchase.
6) Attempt to sell the shares at 10% over the average buy price.

Option side
1) Use covered calls to generate a better return from the stock.
2) Cover calls premiums are to be at least equal to the stock’s quarterly dividend.
3) Look for the best option price on either the US or Canadian option exchanges.
4) Don’t fret if the stock is called away.