August Option Investing – FAS Covered Calls

Thank you money management!  My position in FAS fell a little over 50% last month.  Below the all time high of 75%, but not exactly what I was hoping for either.

On the bright side, I was able to trade calls as the price fell, and reduce the damage a little.

While rearching trades last weekend, I noticed that FAS had calls that expired every week in August, and now there were calls expiring August 26th.  At first, I thought this was a typo…the calls were trading at 0.85/share for 1 week of time value, which is 50% of the premium I got in July (which was for 4 weeks of time value).

I decided to enter a trade and see what happened.  I was still sitting on my FAS shares, so I figured it was worth a shot.  Worst case, FAS skyrockets back to $25 and I miss a chance to recoup losses.  Best case, I just trade options every week on FAS and try to make as much money back as possible.

On the 22nd, I sold August 26th calls, with a $12.00 strike, for 0.85.  On Friday, my calls were exercised, mainly due to the rise in the banking sector after Buffet bought into Bank of America.  Now…do I follow Buffets lead and buy back into FAS?  Decisions, decisions.


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

2 Responses to August Option Investing – FAS Covered Calls

  1. Edwin says:

    awesome blog, do you have twitter or facebook? i will bookmark this page thanks.

    My site:
    agence rachat credit

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