I also bought back the 5 Jan 2011 $22.50 calls I had sold a week ago. I wasn't comfortable having 15 long calls and 20 short calls in that spread trade. Just some free advice, the stock moved down $2 and I was only able to capture $1 of profit. This is because the bid/ask spread is so wide on the far out expiration months. So yes I made $500, but it would have been $1000 if I was just using the stock instead of the options. Going forward I'm not going to screw with it.
Tuesday, June 2, 2009
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I've never used this site so not quite sure how it works yet. A few days ago I posted that I sold naked $40 JPM calls for June for .53, I just bought them back for .30. JPM seems to be in a trading range so until that is broken I'll just continue to play it. I put the order back on to sell again at .50. It's always a little psychologically difficult to buy back time value when the stock is $5 away from your strike price with only a little over two weeks left until expiration. I'm not quite sure why the stock opened down $1.50 today, maybe because they were out raising more equity to pay back TARP.
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I am curious as to what made you buy these short calls back? What has changed since you put them on? I took a look at JPM and its price action on the chart and this still looks like a good risk/reward trade. Looking at the charts it looks like it has put in support at $34 and resistance has been building at about $38. If this were my trade I would look to hold the calls until $38 was violated and then I would re-evaluate.
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ReplyDeleteUmmm... on your financial note I bought back 10 C covered calls today at about a 40% profit. I sold the cc;s when they were 26¢ and bought them back at 15¢.
ReplyDeleteYesterday I picked 2 positions: QUIX & ATCO. ATCO was a falling knife that sliced right through my stop limit. QUIX looks like it's in a volatility squeeze poised to pop. It's up 4% today.
I bought them back because it was at the lower end of the trading range that you mentioned. At a minimum I've locked in some gains, the goal would be to hopefully sell more naked calls again if/when it bounces up towards the top of it's range again. Just trying to trade the same contract a few times within the expiration month rather than just wait for it to expire.
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