I think the challenge will be getting option prices from the date of purchase...because if you do the covered call strategy, to be fair you must start on the purchase date of the stock. You would have written the JULY 40's or JULY 45's initially, then bought them back and re-wrote lower strikes all the way down. I don't have historical option prices at my finger tips, so if I try to do that, it will take some time.
But your issues is as of right now, all you can do is either hold the stock long hoping it returns to your purchase price, exit the stock and look for greener pastures, or undertake a covered call exercise to reduce your losses and basis.
Selling the Sept 25's are a premium of roughly 13%. That is a good PREM based on stock price, although at this point, you are still hurting from your purchase price.
I don't know. I guess I would sell the SEPT 25's and then if it rocks up, buy them back, and sell the SEPT 30's and keep doing it until you finally have a strike that is not called away, and then just keep selling covered calls. Eventually you will have your $15 dollar loss back.
I would be more than happy to hear from the experts on this, as I am just surmising the best plan out of it. I feel like a baby at this point when it comes to these strategies.
Hope that helps.....
-SE |
