Recent Option Transactions

With the continued market weakness on Wednesday and Thursday this past week, I closed out the $39 and $41 call options that I had open on some of my HAL shares.  I recent devised a strategy to try and maximize income and diversify out of my employer's stock.  I had originally sold both calls on April 9th so this was a much shorter holding period that I'd have liked.

I was a little impatient with selling the calls originally and should have spread them out a bit more.  With the market's taking a drop this week and oil stocks leading the way, the call options became cheaper so I bought to close two of my call options in hopes of re-selling it at a later date to increase the premium and my sale price should it be exercised.

On Wednesday, I bought to close the $39 call for $1.67 and if you remember, I had received $211.26 in premium when I sold it.  My net profit on this trade was $35.88 which ended up being a 0.92% return in just over a week, so it was a nice 42.00% annualized return.

On Thursday, I had actually forgotten about my open buy to close order so I was a bit surprised to see it in my executed orders.  To close the position it cost my $0.86, $86, which after commission and fees netted me a $29.03 profit on this trade after subtracting this from the $123.01 I had received upon the sale.  This represented a 0.71% return which is annualized to a 28.73% rate.

Normally I'd look to close the call for a higher dollar return and a longer holding period, but almost 1% gains for a week of the trades being open is fine by me.  As I mentioned earlier, I was a little impatient when selling  the calls, so I was glad the markets gave me a chance to unwind the calls.  I'll be looking to re-sell some calls once the markets take their next move higher since call premiums will be juiced.

So far in 2013 I've received $470.78 in option premium.

I've updated my Portfolio and Option Summary pages to reflect these changes.

Comments