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Strategies & Market Trends : Calls and Puts for Income
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To: dealmakr who wrote (4989)12/19/2011 8:17:12 AM
From: dealmakr   Read Replies (1) of 5891
 
HCBK position 12/17/11

After looking deeper into this one , have decided to take a longer term play. Book value north of 10 with tangible book over 9. Bank was overleveraged on the asset side and in delevering the stock got crushed. Still a premier franchise in the metro NY area yielding north of 5% on the dividend with some fairly decent premium available for writing options.

On expiration Friday news hit of another writedown on deleveraging another 4+billion from the balance sheet. With the company reaffirming the dividend policy the stock rose quickly above 6 and by the end of the day closed right on the money. In trading this past month I found myself a bit overleveraged as far as having too many short 6 calls uncovered near expiration and had to buy in some more stock along the way. Will use the FI/FO (first in/first out) to determine the cost basis for the position along with the Dec exercise and profit.

10/26/11 Bot 5000 HCBK 5.75 (28750)*
10/26/11 Bot 5000 HCBK 5.81 (29050)*
10/26/11 Bot 5000 HCBK 5.84 (29200)*
10/26/11 Sold 100 Nov 6 Call .15*
10/26/11 Sold 50 Dec 5 Put .15*
10/28/11 Bot 5000 HCBK 6.29 (31450) (1200 exercised @6 Dec / balance 3800 shares)(23902)
10/28/11 Sold 50 Dec 6 Call .475 avg*
11/01/11 Bot 5000 HCBK 5.9 (29500)
11/01/11 Sold 100 Nov 6 Call .15*
11/02/11 Sold 25 Jan 5 Put .25
11/02/11 Sold 20 Apr 7 Call .25
11/09/11 Sold 25 Dec 6 Call .25*
11/09/11 Sold 25 Dec 6 Put .45*
11/14/11 Sold 25 Jan 6 put .60
11/16/11 Bot 5000 HCBK 5.75 (28750)
11/15/11 Sold 75 Dec 6 Call .15*
11/17/11 Sold 50 Dec 6 Call .15*
11/25/11 Sold 100 Jan 6 Call avg .108
11/25/11 Sold 25 Apr 6 Call .31
11/28/11 Bot 2500 HCBK 5.24 (13100)
11/29/11 Sold 50 Jan 6 Call .10
11/29/11 Sold 25 Jul 5 Put .75
11/30/11 Bot 2500 HCBK 5.32 (13300)
12/01/11 Bot 2500 HCBK 5.61 (14025)
12/01/11 Bot 2500 HCBK 5.68 (14200)
12/02/11 Sold 25 Jan 6 Call .25
12/06/11 Sold 25 Jan 6 Call .30
12/06/11 Bot 2500 HCBK 5.97 (14925)
12/07/11 Sold 25 Jan 6 Call .30
12/08/11 Sold 25 Jan 6 Call .25
12/12/11 Sold 25 Jan 6 Call .21
12/13/11 Sold 25 Jan 6 Call .25
12/14/11 Bot 5000 HCBK avg 5.895 (29475)
12/16/11 Bot 2500 HCBK 6.05 (15175)

Closed trades Profit/Loss

11/02/11 Dividend .08 on 25000 shares 2000
11/19/11 Expired 200 Nov 6 Call 3000
12/14/11 Bot close 25 Dec 6 Put .25 500
12/17/11 Expired 50 Dec 5 Put 750
12/17/11 Expired 38 Dec 6 Call
12/17/11 Exercised 162 Dec 6 Call 4875 (includes expired)
12/17/11 Sold 16200 HCBK 6.00 2652

Total return P/L on closed trades 13777

Long 33800 HCBK avg/share 5.81 (196352)

Stock closed 12/16/11 6.00

Short 25 Jan 5 Put 625
Short 25 Jan 6 Put 1500
Short 300 Jan 6 Call 5480
Short 25 Apr 6 Call 775
Short 20 Apr 7 Call 500
Short 25 Jul 5 Put 1875

Net position exposure

Covered calls 33800 shares
Naked Calls 700 shares
Naked puts 7500 shares
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