As FAS began to plummet today, I decided to sell a $10 call for July on part of my position in FAS in order to have some coverage in case the ETF stays under $9 for an extended period of time. Although the premium was not large on an absolute basis, it is about a 5% return if the ETF is unchanged at expiration. The purchase info is below:
5/21/2009 -- Bought 100 FAS @ 9.045
5/21/2009 -- Sold To Open 1 FAS June $10 Call @ 0.86
5/21/2009 -- Bought To Open 1 FAS June $8 Put @ 1
6/19/2009 -- Covered Call & Put Expired
6/22/2009 -- Sold To Open 1 FAS July $10 Call @ 0.5
The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $904.50
Downside Coverage (based on current price): None
Possible Max Upside: 16.07%
Annualized Max Upside: 101.1%
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