Thursday, February 21, 2013

That's What I'm Talkin' About

Last week's expiry brought a quickie - GE getting called away very early (one of the great questions I got in  my talk to the SF Options Group). Since profits are capped by the covered calls, losses must be kept to a minimum to balance them. However, surprises occur on the upside as well. The GE trade, put on in mid-December, only lasted two months (1 dividend) but garnered just over 20% annualized from the June call which was exercised for some reason. GE was bought at 21, call sold at 20, yet the stock is only 23 today. With an expected correction upon us, I'll wait for a further investment.
Also, part of my MCHP was called away after its run up (finally). It was the 27 strike call - the 34 remains.
My sentiment blog has warned of a downturn (as has the media), so I've put on a SPY put spread and the SDS inverse SPY to hedge. So Far....

1 comment:

  1. Answer to Anonymous: I like to write puts to take on a stock (Buy/Write), but ot on the VIX - espec. when it's low volatility - IV -.