The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- I have spent a considerable portion of the last week discussing several media stocks on TheStreet. My article history contains stories that explain why I am bearish Netflix ( NFLX) and Sirius XM ( SIRI) and bullish Bell Canada ( BCE), Rogers Communications ( RCI), Time Warner ( TWX), Madison Square Garden ( MSG) and Pandora ( P).
If BCE trades below 40 between now and expiration in May, I could get put 100 shares of BCE at $40 for each contract I sold. If that put expires in-the-money by $0.01 or more (BCE trades below $40.00), I will almost definitely get put the stock. I am fine with that possibility because I am long-term bullish BCE. If I get put shares, I will take another look at the covered calls and investigate writing one that is slightly out-of-the-money. If I do not get put shares, I will look out to June and write another put. In either case, you can continue to repeat this process, shifting between cash-secured put and covered call, going forward. Because BCE, RCI and TWX pay dividends, I have even more incentive to scale into each position and reinvest that income on a regular basis. This is where a low-cost, no- or few-frills brokerage can make a lot of sense. In many accounts, the cost of periodically buying a relatively small number of shares can eat into returns. In my Options Investing Newsletter this coming Tuesday, I discuss how I get around this particularly thorny and important issue.
>>Also see: Why I Am Long Madison Square Garden I purchase more shares in each of these stocks between one and four times a month. I continue on this course, irrespective of any near-term pressure, as long as the long-term narratives I weaved in my previous TheStreet articles on the companies remain intact. Buy 50 to 250 shares of MSG Write MSG May $36 or $37 calls if able to get a price of $0.50 or $0.30, respectively, as of Tuesday's close MSG is another long-term stock to scale into over time, but at roughly one-half the pace of portfolio's core holdings. Buy 50 to 250 shares of P On strength, write slightly out-of-the-money calls 2 to 3 months from expiration Clearly, Pandora represents the most speculative stock of the group. Personally I continue to scale into the position, most recently purchasing shares at $8.38 on Tuesday. >>Also see: Why I Am Long Pandora I have been slowly scaling into the stock since late last year with little concern over the near-term volatility. I feel like I know the company well, thus I have confidence it will execute its long-term vision. More than any other stock in this portfolio, however, a position in Pandora might not work for an investor with even a hint of a faint heart. In a future article, I will outline how I would look at working bearish plays on relatively high-priced NFLX and low-priced SIRI into the mix using options.