Captain Capitalism

Sorry I haven't posted in the last couple of weeks - been preoccupied with that school/studying thing. But I'm back (groans all around).

The third Friday of the month has come and gone, and so it is time to make more money. Last month I recommended Evergreen Income Advantage Fund (EAD), but that's a long-term investment and it won't help to recount.

This month, I'm picking Human Genome Sciences Inc. (HGSI). Yes, you can tell from the name that it's a biotech company. This one happens to concentrate immunology and oncology with a fairly promising albumin fusion protein in the development pipeline. HGSI currently sells for $13.11 per share and its October $15 calls pay $0.75, which is 5.7% for five weeks or 58.4% annually. Alternatively, you could sell the November $15 calls for $1.25, which is 9.5% for nine weeks or 55.1% annually. Bear in mind, if your option does get called away, you'll gain another $1.89 per share (the difference between share cost and strike price) which amounts to a 14.4% additional gain. Personally, I don't think HGSI will hit $15 this year, so this might be a good stock to buy and hold while selling monthly options until it does reach $15.