Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: dealmakr who wrote (5245)	7/21/2012 5:42:22 AM
From: dealmakr	Respond to of 5891

07/21/12 Position closed FCX 07/09/12 Bot 1500 FCX 34.41 (51615) 07/09/12 Sold 15 07/13 34 Call .66 07/10/12 Bot 1500 FCX 33.61 ((50415) 07/10/12 Sold 15 Jul 32 Call 1.75 07/11/12 Sold 15 Jul 33 Call .75 Closed Trades Profit/Loss 07/11/12 Dividend .3125 on 3000 shares 937.5 07/13/12 Expired 07/13 34 Call 990 07/21/12 Exercised 15 Jul 32 Call 2625 07/21/12 Exercised 15 Jul 33 Call 1125 07/21/12 Sold 1500 FCX 32 (49500) 07/21/12 Sold 1500 FCX 33 (48000) Original cost of position (102030) Sales proceeds from stock (97500) Loss on stock sale (4530) Premium received from options sales 4740 Gain on position from exercise 210 Dividend accrued 937.50 Total return P/L on closed trades 1147.5 Another bumpy ride where the stock traded down below both strikes of where the CC's were written. Earnings lifted the stock back over the strikes and allowed the stock to be called away. The final result was ok and the protective CC's did their job for the purpose of dividend capture. The purpose of the trade was to try and capture the dividend and hedge by using options. In the first entry the stock bot @ 34.41 had a .25 time value over intrinsic on the weekly series fairly close to the dividend of .3125. The 2nd buy @ 33.61 is where I put on a longer term write at the 32 level with the .14 over intrinsic at the time. I thought that I may be called out on this one, but not to be. Looking at the total premium written of the calls of 4740 and subtracting that amount from the total cost would give me an adjusted cost of 32.43 if they expired with some downside protection from initial purchase price, not including the dividend. If exercised on the 32&33 strikes same thing, no gain on the stock except for the dividend capture. The short 34 calls may be bot in to cover. If exercised on the lower strike, will look to use the weekly series to write more CC's until I hopefully get called away. This position doesn't include the short Nov 26 puts that I have open. Very tough market out there especially in this sector. Just wanted to throw this one out there and see if anyone has a comment on using options for dividend capture. Good trading dealmakr