Sold More DRYS Calls

DryShips Inc (DRYS) has been a very poor investment for me.  I got in too early and sold puts through a rookie typo when I tried to buy downside protection a few weeks ago.  I corrected that mistake within 10 minutes for a $100 loss, but never went back in to buy new puts.  DRYS has fallen another 50% since then and has bad press chasing it lower.  After it came back up from its lows the last time, I made another mistake and intentionally sold puts at the $17.50 strike.  Now I own 200 shares and my naked puts are nearly $5.00 in the money. 

To try to pull some more cash back from these bad trades, I decided to sell new calls for November.  While DRYS was trading at $12.85, I sold four November 17.50 calls (OOCKW) at $1.05 each and received $407.00 after commissions.  Two of those calls will act as covered calls and remove the shares I own.  The other two calls will be a loss if DRYS can rally $5.00 in three weeks (could happen in two days the way this one trades), but I’ll make up the difference on the 200 shares I own and the 200 shares I would have been assigned if the naked puts were assigned.  Basically, if DRYS gets back to $17.50 I’ll have ~$1000 more from the increase in underlying value and still have the $400 from the options.  Anything above $18.50 at expiration starts getting dicier. 

My margin balance is down to $1,065.32.  By 10:30 am my account had already fluctuated $3,500+ for the day.  That’s insane, but I’m sticking around for more still.  I have a lot of time value left to erode over the next 13 1/2 days.  That’ll help, but doesn’t make up for the losses I’ve taken by about five fold.