<As for SPYG, I sold Jan 40 calls on 75% of my position, when we were at 50. Sorry, folks, but I think they will expire worthless.>
Why did you sell the Jan-40calls instead of the Jan-50s or the Jan-55s?
By selling such a deep-in-the-money call as the Jan-40s, there'll be a very good chance that your shares will be called away at expiration, denying you of further upside participation. For your options to expire worthless, the underlying stock would have to close at below $40 at expiration.
Personally, I thought that the short term spike to $50 would have been a good opportunity to short volatility, but not necessarily to get rid of the stock entirely (because I felt that the stock still had good long-term potential).
I sold the Jan-55 calls for an average price of $5.15 on 100% of my positions in SPYG when the underlying stock was trading at around $47 three days ago. I would have been satisfied to sell the stock at the equivalent of $60.15 at expiration.
I am still long-term bullish on SPYG. I may have to buy my shorts back...
Currently, with the stock at $47, they are offered at $2-7/8.
Oh, they're rallying. Currently, the stock is at $48-1/2, with the Jan-55-calls offered at $3-1/2 ! |
