Options Expiration – November 2011

Options expiration finished pretty good for me on a few positions, but really bad on a couple of others that wiped out my gains on the good ones and then some.  This is how it shook out this month:

• UCO – 3 November 26 naked puts – Finished out of the money by a long shot.  I could’ve easily gone with a much higher strike, but there was no need to take the extra risk since I own 300 shares too.  This gave me a nice little return.  I’ll add some more UCO puts fairly soon.  Most likely I’ll target January expiration to couple them with my January $40 covered calls.  UCO broke through its recent ascending trading channel, so I might wait to see when it gains better support.  Then again, January $33-35 strike puts are probably not a major risk.
• VNQ – 1 November 50 naked put – Finished out of the money for a full profit and helped reduce the cost per share of the 100 shares I own.
• VNQ – 1 November 55 covered call – Finished very close to the money.  I placed a limit order to roll the covered call, but it didn’t hit. I didn’t give too big of a chance for it to hit maybe, but was fairly close.  There wasn’t a need to chase the ETF since I’m not sure if I want to own VNQ right now.  It looks like it might have some more downside to it.  I could turn around and sell naked puts out of the money if we see much more of a dip.  The position finished with a loss on the series of trades of $152.49.  If I had rolled the covered call I’d have been back to a paper profit, but if VNQ heads further south I’d be back to a loss again.  In the end it just seemed to be a better time to step back and take inventory of what I have.
• QCOM – 1 November 52.50 covered call. As expected, my QCOM options finished in the money and I’ll be forced to sell at the same price I bought the 100 shares.  I did well this round trip with QCOM, so I decided to go ahead and try it again at the same strike.  While QCOM was trading at $55.73 I sold one QCOM January $52.50 naked put for $1.92 and received $191.65 after commissions.
• MVV – 1 November 70 naked put and 1 November 71 naked put.  These are both going to be assigned as they are my biggest losers of the month and are deep in the money.  I have a limit order in place to sell February $60 covered calls, but I might change that on Monday to January or even December.  January options aren’t available yet, so I couldn’t do it today.  I can sell covered calls far enough out of the money that I’ll still get a good return and will also set myself up to finish the series of trades with a profit.  The trick is where MVV is going in the near term.  It might be a better trade to leave some upside risk and sell lower covered calls for better premiums.  Lots to think about on this one still…
• DSX – 3 November 8 covered calls – With about 30 minutes to go in the trading day my limit order hit to roll my DSX puts to December.  While DSX was trading at $8.05 I bought to close three DSX November $8 covered calls for $0.07 and sold to open three DSX December $8 covered calls for $0.43 and received $104.26 after commissions.  I almost didn’t sell new covered calls since DSX looks closer to the bottom of its trading range than the top, but I did and to compensate myself for the upside risk I added new naked puts to go with my covered calls.  With less than four minutes to go in the trading day I moved my limit order lower by $0.05 from $0.40.  While DSX was trading at $8.10 I sold three DSX December $8 naked puts for $0.35 each and received $102.83 with commissions.  Now I’m long 300 shares of DSX with an options straddle at December $8.00.