Option Trades on FCX, SSO & USO

FCX

I didn’t even know this one hit yesterday until I was checking something else this morning.  While FCX was trading at $26.27 I bought to close two FCX November 40 covered calls (FCXKH) for $0.50 each and paid $111.49 with commissions.  I’m expecting FCX to come back some and want to have room to sell new covered calls at a higher premium when (should say “if”) FCX comes back.  This gave me a realized profit of $407.01.  Had I waited until today I could’ve gotten out for 10 cents cheaper per option.  For a trade that took three days, I’m happy to get my profit out so quickly, but that smile fades quickly when I see what I lost on the stock on paper in the meantime.  Now I have to decide if I want to sell new calls at a lower strike.  I’d rather wait to see if FCX comes back some from these lows this week.

SSO

I watched the market open this morning with great anticipation that we’d see a good hard capitulation.  I wanted to sell some SSO (double the S&P 500 ETF) naked puts far out of the money with fear kicking the premiums to silly levels.  By the time the options I wanted to sell showed a bid, the markets were turning north.  I didn’t want to chase the trade and waited only to see SSO come up off its lows.  Eventually I decided to chase.  I entered a limit order on SSO to sell five naked puts out of the money and while SSO was trading at $26.13, I sold to open one SSO November 22 naked put (SOJWV) for $2.20 and received $209.25 after commissions.  It was a partial fill and left me with four unfilled contracts. 

TD Ameritrade allows an order not to charge new commission if you don’t change it, so I left my order in place to hope for the fill later in the day.  At around 1:50, almost an hour later, the rest hit.  While SSO was trading around $25.75 my other four contracts hit and I sold to open four SSO November 22 naked put (SOJWV) at 2.20 each and received $876.98 after commissions.  That gives me a total of $1086.23 from the SSO options I sold today.

USO

While at oil ETF USO was trading at $52.47 I sold four November 64 naked calls (USOKC) for $1.45 each and received $576.00 after commissions.  I’m still long 100 shares of USO and now have a negative 74 delta on my USO holdings.  I’m short a total of seven calls, all far out of the money.  I’ll start closing those quickly if I start to think oil has a chance to turn around.  I have a good $10+ cushion to the upside for now and have three weeks before all my options expire.  USO can move $4 a day with no trouble.  I’ve heard some analysts/pundits saying oil could fall another 12%.  I’ll be happier if it just flattens out until after November options expiration.