I created a covered call position with SPY for a net investment of 108.43 per share, bought SPY at 110.298 and sold Feb 111 calls ( SPY 02/20/2010 111.00 C in Schwab speak) at 1.87. I sold out of the money calls because I’m pretty optimistic the market will retrace the recent drop-off.
Best case profit would be 2.57 per share or 2.3%. Initially I tried a debit order, but it didn’t fill immediately, and I didn’t want to spend time tweaking it, so I went with consecutive market orders. Since near the money SPY calls were trading with a 1 cent bid/ask spread this is a cost effective approach and takes the time uncertainty of the debit fill out of the picture.