I'm not sure over the next few months the stock will stay below 25. Being that I'm slightly more bullish on the underlying stock, I'd like to write for 27.5s at this point. May is definitely out. Jun 27.5s about 11/16, July 1 1/16 and Oct 2 1/2. Hard to know which to take. By Oct, stock may be above 27.5, but perhaps not after dropping a bit. May be a chance to buy to close before then.
In at 22, so that would yield 8 points on 22 or over 30%, minus commissions. I tend not to annualize my yield, only because I think it falsely inflates what I've actually done. After all, anyone could make 1% in a day of trading, but annualizing that to 365% in a year clouds what you've really done.
I don't think I'd sell in the money calls at this point, unless they were pretty near term. While 1 1/2 looks good for Jun 25s, I wouldn't want to get called there. That would yield 26 1/2, whereas I could be at 30 by Oct. Is the four months worth the 3 1/2 points from 26 1/2 to 30? Maybe not.
What do you think?
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