DRYS – What To Do?

Forbes had an article explaining why DRYS and other dry bulk shipping companies are a bad buy right now.  Forbes seems to be under the belief that the economy will never pick up.  I had to give DRYS some extra thought throughout the day yesterday.  I’m long (own) 200 shares and short (sold) two naked puts and six calls.  Two of my calls are so far out of the money I’m not even thinking of buying them back for a profit.  I’ll just let them expire worthless in three weeks.  The two puts and the other four calls are all at the $17.50 strike and are all at a paper loss for me now.  Obviously one side will have to “win” in the end.  I can’t lose on both if I hold until expiration, but either can cost me a lot.

This week has seen DRYS bounce from just above $12/share to almost $18/share.  I watched it a lot, but made no new trades.  It closed yesterday at $17.17.  That’d be an ideal close for me at November’s option expiration, but I’m not even close to banking on that.  I could see DRYS dropping $5 back down to $12 again before I could see it gaining another $5 to $22, but since the price doesn’t seem to be moving completely rationally right now and I’m already in I’ve decided to weather it for a while still.  It might be years, but DRYS will come back when the economy does.  After November expiration I might take my losses and move into DSX if I see something change that makes me think the run could have legs.

The most important numbers we need to watch this weekend are going to be in the GA/FL football game at the World’s Largest Cocktail party.  Go DAWGS!