Amazon, a company that I rely on. Building a position

Majority of my business are coming from Amazon.com.  Naturally, I have first hand experience with the strong growth it delivers.

12/1/2011, I couldn't resist it anymore.  I bought 200 shares of Amazon at $197.454/share.  I am no stranger to Amazon stock, i bought it in 2007 and sold it at lose.  I bought it again in 2009 and sold it for gain.  I did it again early this year and capture some meaningful gain.  My total gain on Amazon, after offset by lose is $43k.

My purchase price is high.  And this company never go on sale.  P/E is nearly 100.  The growth of Amazon is amazing though.  quarter after quarter revenue growth is over 50%, even at such a big base.  And the management is very good.  History shows they do not care about current margin.  They are focusing on the future.  Invest heavily on the future growth.  I found that approach very smart.  Now, I am using my trusty Covered Call strategy.  I understand even if the company is a good company, if i over-pay, I will not benefit from the position.

My position looks something like this:
12/1/2011 AMZN 197.454 12/17/2011 5.45 31.45 200 10 4.05% $7,964.55 16 92% $197,454.00

Option execution date is 12/17/11.

Today is 12/17/11, stock price dropped to $181.  So, i still own the 200 shares.  And the Dec 11 CALL premium brought my stock cost down to $192.004  (i am ignoring the personal tax consequence, just to simplify things)  OK, to make those 200 shares to work, I have the following 2 choices.

12/1/2011	AMZN	197.454	1/21/2012	8.45	31.45	195	10	3.04%	$      5,964.55	51	22%	$  197,454.00
12/1/2011	AMZN	197.454	2/18/2012	11.05	31.45	200	10	6.89%	$     13,564.55	79	32%	$  197,454.00

Jan 2012, $195 option call, if success, can translate to 22% annualized return in total 67 days.  That is a very good return consider 15% return is my ultimate target.

Feb 2012 $200 option call, if success, can give me 32% annualized return in total 95 days.  I like that a little better.  Because I am bullish about online shopping.  I am bullish about Amazon's strategy.  My own business's result support my point of view.  I do see phenomenal growth rate from Amazon's order.  Even their profit margin is volatile.  If they continue gain market share, they eventually can demand higher margin.  Third party merchant has no choice but to pay commission to Amazon.  The platform they built for third party merchant is so well.  Brings merchants tremendous success, a success that the merchant otherwise can't achieve.  

To summarize my reason.  I choose $200, (my cost is 192+) because i am bullish in Amazon.  I choose Feb is the premium v.s. risk is within my satisfactory level.  It will be after their earning report.  If this option position fail to get executed, then, I'll continue hold the stock and sell longer term CALL.  I am somewhat hopping it does not get executed.   If on other hand it get executed, i made 32% annualized return in 95 days.  Not bad~ I anticipate a volatile 2012.  So, the cash i get back can be used to pick up other bargain stocks.

Note: Due to its high P/E.  The near term downside can be very big.
Due to its high growth rate and strong market share. The foreseeable long term downside is minimal.