December Option Investing – DRN Covered Calls – Updated

On the 20th, I initiated an income trade using DRN, along with the statement that I would monitor my trading system for an opportunity to add to my position.

If my program indicates a shift back into an uptrend, I may purchase some additional shares of DRN and sell calls above the strike price the first week in January.

Well, an opportunity arose, and I took it.

My program signaled a shift back to an uptrend on the 22nd. So I was already anticipating adding to my position in early January.

Trading around Christmas usually involves minor rallies on low trading volume. And low volume can result in mispricing. On a normal day, DRN already has low trading volume on its options, which is reflected by HUGE bid/ask spreads.

Today, I noticed that a few bids seemed to be high on the high side. After plotting the bid/ask price curves, I decided that the mispricing represented an opportunity and pulled the trigger on 2 Jan $58 covered calls.

Gross Cashflow (today): ~$443 USD
Gross Cashflow (Dec.): ~$1746 USD

And with that, I’m off the celebrate the last few hours of 2010! Here’s to 2011 and achieving financial independence! Thanks for your support.

Celebrate Safely and Responsibly and see you next year…

Related Posts:

Income Trade: DRN Position Initiated
Income Trade: DRN Position Dividend


About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

2 Responses to December Option Investing – DRN Covered Calls – Updated

  1. Most of the blogs online are pretty much the same but i think that your blog can be an exception. Bravo !

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: