I closed my MON call this morning earlier than I should have. I’ve been expecting it to break down some, but over thought it and made a mistake. The upcoming days will tell me how much of a mistake it is. While MON was trading around $82.00 this morning my limit order hit and I bought to close my one MON March 80 covered call (MONCP) for $2.20 and paid $230.74 with commissions. I made $3.51 on the option.
My plan was to get out later in the day if and maybe roll the call if MON looked strong still or let the covered call force the sale of my 100 shares. Instead I charted MON and saw it was hanging above its 10 day moving average and was at the bottom of a possible trading channel. My fear was that it was breaking below overbought, but decided the trend was going to be my friend. That’s kind of a weird move for me to have made I thought right after I did it because this whole month I’ve used Williams %R to guide my MON trades and each one has worked. We’ll see what happens, but I’m not as confident with this trade as I was the others. Maybe because MON dropped another $1.00 after I made the trade is why I’m doubting myself. It bumped back up some after that which means I need to stop watching now and get back to work.
On a side note, I received $50 dividend payment from my TDW shares last week that I just noticed and $52.50 from JOYG yesterday too. As an option seller I rarely plan for dividends, but like those occasional gifts, especially since they are taxed lower than my option premiums.
