Alcoa bounced over $14.
The last option trade of the $12.50 Jan puts is in the money by about 2%. We will leave this trade in place for awhile longer to try to get at least another 1% return.
Sold Jan $15 calls against the 1/2 position @$.35c for over a 2% yield on this position over 7 weeks. (nearly 15% annualized)
Bull case - Alcoa continues to rise over $15 resulting in both option trades expiring at full return and the core position being called away potentially limiting profits.
Target return - The stock settles in near $14 and both options can be closed at a profit.
Bear case - stock falls below $12.5 and will be forced to acquire the other half position at $12.5 less the profits from options.