You are presuming that they will expire, these obviously won't. You always need to consider the possibility of assignment.
I meant expire in the money, and result in an assignment. An in the money expiration is called "expiration", or something else?
For all these UAN puts, I sold them about four months ago, in the money at the time, and they're profitable trades. I can buy them all back today, and each position would cost me less than I paid. I don't want to do that - I prefer to roll them forward if I can, but they've still been a profitable trade (as of today) even though they are in the money.
They were also in the money when I sold them. I thought UAN would rise with increasing fertilizer prices as we head into planting season. It hasn't happened quite the way I planned, but the time value in the sale was enough to make the time decay turn the trades into profitable moves.
But I want more!
2 weeks to go, who knows what will happen. I need a vioilent upward move in fertilizer prices to get all of them out of the money, and that seems unlikely. But if UAN just goes up about $15 more in the two weeks, rolling them seems (since they will be closer to at the money) easier.
The $160 UAN puts don't seem easy to unwind, so I may just sell some of the UAN units I own, and then get put some new units at $160 if I can't roll them forward at zero cost. But the tax implications of trading MLPs are no fun. |
