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JLS

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Alias Born 12/14/2004

JLS

Re: JLS post# 1709

Friday, 10/06/2017 11:26:57 AM

Friday, October 06, 2017 11:26:57 AM

Post# of 3658
Covered Call decision day.

The $38 Calls I sold a week ago brought in $0.51.

But MU is persistently staying outside the channel, which I thought it would not do.

If I do nothing, I'm out of MU at the end of the day at an equivalent price of $38.51 while MU is trading at a little over $39. So, to be polite, my exit from the MU trade (which I've held since the low teens) wouldn't look very graceful. To get back into MU I would either have to outright buy the shares, or sell Puts with the result that I would have income from that and I might be assigned shares at the Put strike.

I decided to not do nothing. This morning I bought back those $38 Calls for an average price of $1.27 then I sold Oct 27 '17 $40 Calls for an average price of $1.06.

The net result is that I now have a net gain on the Calls of $0.30 (instead of the original $0.51), and my potential exit price of MU, if assigned, is now $40 instead of $38.

The other thing I've gained is time. The original Call sale had 6 trading days to play out. The current trade has three weeks. That gives me a lot more time to massage this thing to maximize income.

I still think that MU should drop back down into the fork and trade higher within that constraint. I don't think it trades strongly enough to justify adding a fourth tine to the fork.
Volume:
Day Range:
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Total Trades:
  • 1D
  • 1M
  • 3M
  • 6M
  • 1Y
  • 5Y
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