Marathon Oil (MRO) Covered Calls

With less than a minute to go in trading yesterday I changed my limit order for two MRO September 60 calls (MROIL) from 1.60 to 1.50 and it hit immediately.  I received $288.50 after commissions. 

MRO is a stock that was assigned to me in July from July 62 naked puts that finished ITM.  I had an opportunity to buy them back for a profit, but liked the stock enough to take the assignment.  I thought MRO would bounce back at around 60, but I ended up selling my covered calls while MRO was trading at 55.20 yesterday.  I sold so far out-of-the-money because I can still see the likelyhood that it could be near support and come back up.  If I hadn’t been so wrong $1,000 ago I’d have let it ride longer, but decided to cut my losses. My standard rule up until last week was to cover any assignments immedietely.  This kept me from making bigger profits when a stock bounced, but also locked in more profit up front.  I changed my plan at the exact wrong time and now I’m faced with cleaning up my mistakes for potential losses.  If I write calls on these stocks now and they don’t rebound by September expiration, I could be back in the driver’s seat and with one more re-write I could have a good profit again.

I have a few more stocks, mainly in my IRA, that I completely mistimed and now have to face the music and write calls that could cause a loss.  I really need to keep my head straight and not think of what could have been, but remember to concentrate on where to go from here.  What’s not important is where I purchased the stocks, but how much I can make on them from the current price.

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