Recent Transaction

Yesterday I sold another call option on some of my shares of HAL, my ESPP shares.  I'm currently way overweight my employer's stock.  I have just over 184 shares from the first purchase that went through that has already reached LTCG treatment so I'm trying to collect some premium.  I now have an option on HAL expiring in April 2013 and July 2013.

I sold 1 April 20, 2013 call option with a $39 strike price.  By selling the call option I'm selling the right to buy 100 shares of HAL at $39.  In exchange for selling my right to do with the shares as I please, I was paid the premium in advance.  I can use that cash now to use as I please.  I received $2.54 per share in premium or $254 less commission taking my final premium received to $245.25.

If HAL is trading below $39 on April 20th, the option will expire worthless I'll get to keep the full premium of $245.25 and can then sell the shares as I please or sell other another call option.  The $245.25 represents a 6.29% return through expiration which equates to a 28.69% annualized return.

If HAL is trading above $39 on April 20th, the option will most likely be executed.  In this situation, my effective sale price becomes $39.00 + $2.4525 = $41.4525.  I would have also received 1 dividend payment of $0.09 further increasing the sale price to $41.5425 to calculate my return during the option.  My original cost basis for these shares is $29.334 and the execution would represent a 41.62% return.

I decided to try and be a little more aggressive on the option premium because I need to start unloading some shares anyways.  I felt that this gives me a good combination of further upside if it's executed and option premium if it expires.  Should this option expire then I will look to sell another option and most likely move the strike price lower since I need to start shifting these funds into other investments.

My option summary page has been updated to reflect this trade.


  1. Reading is my passion. Browsing through your site gives me a lot of knowledge in so many ways. Thank you for the efforts you made in writing and sharing your points of view.


Post a Comment