Options Expiration – December 2011

Every single one of my options closed with a profit this month.  I’ve been overdue for a month like this, but it’s not a perfect ending since two of them finish a penny or two in the money and I didn’t buy them back.  Also, a couple were covered calls I was ready to see called away and they aren’t.  If they don’t tank on Monday I’ll be fine, but these days that might be a big “if”.  I didn’t make any trades today in this account and just let everything go where it was pushed or settled.  Here’s how each one panned out:

• BA – One December $60.00 Naked Put – BA closed for the day over $70 which shows I was far too cautious with this trade.  I might enter a limit order for a February $65 naked put, but I want to see how the markets look next week before deciding on that.  I’m happy just to have a full profit on this put.
• CSX – One December $22.50 Covered Call – CSX closed down at $20.29 today, so I should’ve gone lower with my strike, but at least I only have 100 shares and I already sold a new covered call for January.  I’m still considering a new naked put on CSX at the $19 or $20 strike.  It dropped like I said the other day, but not enough to pull me in deeper yet.  That might have been the last good opportunity.  Since I have 100 shares already I don’t have to rush into it and can be happy if it gains ground and leaves me behind.
• DSX – Three December $8.00 Covered Calls – See next bullet.
• DSX – Three December $8.00 Naked Puts – DSX finished the week at $7.99, a penny out-of-the-money for my covered calls and a penny in-the-money (ITM) for my naked puts.  Interactive Brokers’ rules are that any amount ITM issues an assignment, so unless something odd happens on Monday I’ll be up to 600 shares of DSX with an average cost per share of $8.89.  I would’ve been just as content to see my shares get called away for a loss, but now I have to decide what to do.  I might just enter a limit order to sell all 600 shares for $8.05 and see if it catches a bump.  I might write covered calls on all 600 shares and see if I can keep milking it for premiums.  It probably will depend how it opens on Monday and I’ll take it from there.
• JPM – Two December $38.00 Covered Calls – JPM finished today at $31.86, a laughable distance below my covered calls strike.  I sold new calls on these shares a few days ago, knowing they wouldn’t get called away and might end up wishing I had sold them at a lower strike too.
• MVV – Two December $51.00 Covered Calls – MVV finished the day at $52.54, $1.54 ITM.  Since I sold these calls for $3.60 each I would’ve been able to close them for a decent little profit, but instead I decided to abandon ship and let them get called away.  I still have a naked put on MDY, a standard mid-cap ETF, unlike the ultra version I’m dumping.
• TBT – Five December $18.00 Naked Puts – TBT did what I hoped it wouldn’t on some level and hoped it would in another sense.  It closed under $18 by a penny or two (depending which site you check).  I’ll end up being forced to buy 500 shares and have another five naked puts at the same strike for January too.  I’d like to see another good drop in bonds which would send this ultra-inverse ETF higher again.  This has been the area that’s been a floor in the past, so I fully expect this to work out for me.  Depending on where TBT opens on Monday will decide if I try to sell covered calls on this new lot of 500 shares or just stay long and wait for TBT to recover.  I wasn’t sure I wanted this in the sense that I didn’t need this much exposure, but on the other hand I did want the assignment because TBT isn’t likely to stay down too long and I have multiple options (no pun intended) on how I can work it.