May Option Investing – FAS Covered Calls Part 2

FAS appears to be another victim of the latest market correction.  It hasn’t triggered a sell signal, but I think that buying back my $101 option is a pretty safe bet (currently trading at 0.05/share).  I contemplated whether or not to make a quick $50 or so this afternoon by selling an out of the money call.  Ultimately, I decided to try to leverage this weekend’s time value by buying back my $101 option (expired this afternoon) and selling a $97 call that expires next Friday (5/19).

Hopefully, FAS doesn’t fall too much more…it is taking a lot of my 2012 profit down with it!

ETFs (Bought)

  • FAS – $103.46 (Purchased on 4/30)

Calls (Sold)

  • FAS – $101.00 call @ $1.18 (Sold)
  • FAS – $101.00 call @$0.05 (Bought)
  • FAS – $97.00 call @ $1.55 (Sold)

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

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