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Strategies & Market Trends : Calls and Puts for Income

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To: Keith J who wrote (5736)	7/28/2013 11:09:50 AM
From: Jim P.	Read Replies (1) of 5891

I find myself closing out more and more the short options that have declined in value. I have ben burned badly in the past letting them ride for another 3 to 6 weeks for another 5 or 10 cents. I am short a large number of APL August 39 calls. The stock is at $39.27 and the calls are at .65 bid and .80 ask. The stock trades ex dividend on August 5 for a .62 dividend and the earnings announcement is after market close on the 5th with conference call on the 6th. I was planning on trying to roll the calls out through September but waiting for the premium to decline as the net has been only 20 cents at the bid. The calls are sold against January 40 calls that I am long. My plan is to watch the market but try to do the trade on the 5th. Logic being that the shorter term calls will decline with the distribution and the September calls will still retain some additional time value account the earnings announcement before the next opening. Any thoughts? Position is rather large as between 2 account I have about 1000 short calls with Yahoo showing near 1400 open positions. I also may roll the higher $40 strike as the depth of the market is usually better at the more even strikes. Jim

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