Sold Extra QCOM Calls

I’m long 200 shares of QCOM that I bought from my last naked puts that were assigned at $52.50.  I sold covered calls at the October 50 strike a while ago only to see QCOM fall further and put me at a paper loss.  With almost all stocks up the past two days, QCOM has been struggling.  I decided to cut my losses on it and move on.  Barron’s also had some negative comments on QCOM’s outlook this week.  They’ve been hit or miss lately, but the extra negative press didn’t help me want to hold it.

While QCOM was trading at $41.33 my limit order hit and I sold two October 40 calls (AAOJH) for $2.05 each and received $398.50 after commissions.  When I placed the order QCOM was trading under $41.00, so I was selling less than $1.00 in the money (intrinsic) and more than $1.00 of extrinsic value.  I thought about just selling my shares, but figured I should try to get another $200 net profit out of the position.  I sold in the money in case QCOM fell more.  Instead it moved the other direction.  I have less than four days on this contract which could mean big moves still the way these last few days have gone.

I had my record up day yesterday, up $9209 for the day.  I was up better than the indexes for the day which all had record days on their own.  With options expiration this week, I’m gaining on each day passing the as time value melts away on top of the rally we’ve had.  The question I’m debating now is if I should sell new calls while we’re up or see how long this rally lasts.  For now I’m waiting on others aside from QCOM.  CELG has come back so much that I could pull a profit out on my naked puts that expire Friday.  CELG is trading almost at the money for these options, but still has a high implied volatility.