Sold Lumber Mar 240 Put for 6.10 or $671

Lumber (LBH08) is down 1.5% today and I was able to sell 240 put for 6.10 bringing $671 as a premium. This contract expires on 2/29/08, so I will be holding this quite a while. Here is my plan:

1. If LB closes above 240, the option expires worthless, I collect all the premium of $671. I will sell another put option on the following month.

2. If LB closes below 240, I will be assigned a long position from 240. I will try to sell it at 240 and roll-over to next month. If the price is significantly lower, I'll just roll-over. On the roll-over contract, I will sell 280 call or so against the underlying position craeting essentially a covered call case so that I can generate some income in case of stagnation.

You can look at the options price here.