Rate Cuts on an Option Expiration Week

Nothing like a record Fed rate cut during an options expiration week that happens to fall in the most volatile period in history to get the market moving.  I’ve made two trades in the past 14 days – the bullish one turned to a profit today and the bearish one is moving deeper into a loss.  I’m still sitting outside of the trading pit for the time being.  I have a profit on all of my short options right now and some are moving in-the-money today.  I considered closing some of my covered calls as my underlying stocks moved up.  I could close with a profit and hope for more growth in the stocks, but for now I think I’d rather let it ride and let the remaining time value diminish that the next two days has to offer. 

I’m still on margin by $7,200+ and want to bring that back down to a cash position and get back to writing naked puts.  AA ($4,000 market value), CMI ($5,000) and TDW ($8,000) are all in line to be called away (assigned) after Friday’s option expiration if prices stay where they are. My three JOYG covered calls are still $1.65 out of the money.  If JOYG continues to climb for two more days and break $25, I’ll be happy to free up that $7,500 too.  If two or three of these hit I’ll have all of the write-offs I need for taxes this year and might hold my 600 shares of DRYS and the six call options I own too.  The Baltic Dry Index (BDI) is rising again and that bodes very well for DRYS and its competitors.  I own DSX in my IRA and will continue to hold it for the long term too.