Thursday, September 9, 2010

A first for me

I exercised my first option yesterday. I had been long a JAN11 (MET) 12.50/30 call spread since March 09' and the BxA has been so wide that you can't close out the spread without giving up a lot of edge. I've had an order in at the middle for weeks and it never gets filled. So instead of leaving profit on the table when it's more than $10 ITM, I decided to get long the stock and receive the .75 dividend coming. Date of record is in late October. I now have an ITM covered call. My hope is that I get exercised in October because the person holding the long 30 strike will want the dividend. If this happens then I get out at 100% of the possible profit about 2.5 months before Jan OPEX. If I don't get exercised, then I pick up .75 on 1500 shares. If I can close out at that time for .75 or less then in effect I got the max spread as well. 


  1. This is a quick post, but I wanted to let you both know that I am still trading FOREX. However, I will continue to paper trade until I have a proven strategy that leaves me 100% confident that I can withstand any rough spells while trading with real cash.
    My trading style is exactly the same whether I use real money or fictional, therefore it's only my emotions and tactics that need to be solid.

    I'm currently trend trading and I'm short on both EUR/USD and USD/CAD. I'm basing my trades off of 1 hr charts and the only indicators I am using are a 100 and 200 EMA. They are guidelines only as I base most of my trading decisions strictly on price movement.

    That's it - I'll post an update when I have more results to report.

    Good luck!



  2. Hey Will, glad to hear you are still trading. Post some charts when you have some results and show us what you're up to. Take care buddy.