This morning my account bounced back and forth from a paper gain to a paper loss more than five times and as much as $1,500 on either side. That’s just the times I saw it. By the afternoon I settled into a down day. I own nine stocks. I’ve sold six calls (two legs on CMI) and two puts. I’m long three options, two puts and one call. All of my options, except my six DRYS June 2.50 calls, expired today. I had no naked puts assigned to me today and was even able to dump some shares with covered calls that will be assigned. I still need to pick something to sell before the end of the year for a loss to get the tax write-off. This is how each option played out:
Long Options
- DIA Dec 84 Put – Closed out of the money – I made money on this series of trades with the puts I sold at lower strikes below this over the past few months. Up until President Bush spoke at 9:00 am I thought these options might finish in the money, but (lucky for my other positions) they didn’t and I’m taking a full loss on what I paid for them, not counting all the puts I sold with the safety of these options backing them.
- DRYS Jun 2.5 Call – Still holding this one and up big on it, but not big enough yet to make up for my losses on the long shares I own.
- FCX Dec 15 Put – Closed out of the money – I bought these as a hedge when I though FCX was dropping, but it went up instead, so I made the right move to hold my shares and not sell covered calls, but wasted money on this insurance.
Short Options
- AA Dec 10 Call – Closed out of the money – It ran up above $10 almost every day for the past two weeks, but dipped back below $10 today to let me keep my 400 shares. AA closed just below my strike, so I’ll plan to re-write covered calls on it. The premiums are rich.
- CELG Dec 50 Put – Closed out of the money – I sold these two puts when CELG fell below the strike for my CELG December calls. I didn’t think it would stay down for long and it didn’t.
- CELG Dec 55 Call – Closed out of the money – I expected it to come back up above $55 before expiration. It made it above my strike earlier today briefly, but couldn’t stay above its 50 day moving average. CELG made a run in the final minutes of the day, but closed just below my strike, so I’ll plan to re-write covered calls on it. The premiums are also rich.
- CMI Dec 25 Call – Closed in the money – CMI was so far below my Dec 35 calls’ strike that I chose to go in for an extra leg. Yesterday CMI broke above its 50 day moving average for the first time in more than three months. It didn’t stay above it yesterday, but did today. These shares will be called away giving me some much needed cash back. CMI close at $26.51, $1.51 above my strike. I sold the calls for $1.10, so they finished $0.41 above what I could have made had I not sold the calls, but dumped the shares in the last minute of the day. That’s not too bad. I’ll be able to
- CMI Dec 35 Call – Closed out of the money – I should have sold these at a lower strike. I sold these well before the Dec 25 calls.
- DIA Dec 78 Put- Closed out of the money – This position was hedged against with higher puts that I bought months earlier. I’m taking a full profit on this puts and a full loss on the ones I bought. It’s a net profit over the series of trades, but only by a little bit.
- JOYG Dec 25 Call – Closed out of the money – I almost dumped my JOYG shares when it spiked on two days ago on Wednesday, but didn’t and the shares fell. That moved my calls to close today out of the money and I get to re-write covered calls unless I decide to dump my shares and lighten my load instead. JOYG closed more than $1.00 below my strike. It has good premiums too and I don’t think I’ll wait long before selling new covered calls.
- TDW Dec 40 Call – Closed out of the money – These covered calls also bounced in and out of the money a few times over the past couple of weeks, but fell back to the 20 day moving average yesterday where they found support again, but not enough to get them back over $40 by today’s close. TDW closed more than $1.00 below my strike. I think TDW has some upside potential in it and I might delay writing new covered calls unless I see the 20 day moving average break. The premiums are good, so I might not wait too long. The chart and price action will play a big part of this decision.
Long Stocks
- DRY SHIPS INCORPORATED COM – Still holding for now.
- MONSANTO CO COM – Still holding for now.
- FREEPORT MCMORAN COPPER & GOLD CL B – Still holding for now.
- ALCOA INC COM – Still holding for now.
- CHESAPEAKE ENERGY CORP COM – Still holding for now.
- JOY GLOBAL INC COM – Still holding for now.
- CELGENE CORP COM – Still holding for now.
- TIDEWATER INC COM – Still holding for now.
- CUMMINS INC COM – I’ll be able to take a ~$2700 loss on the shares not counting the options I’ve sold against this position. I’ll need that for end of the year write offs.