Monday, January 24, 2011

Trade NYX - trade closed

NYX stock closed at $32.80 on options expiration day. This far exceeded the $30 covered calls that were in place and the position was closed. Overall the trade returned 7.8% in about 2 months (about 50% annulized). The return was comprised of 3.3% stock cap gains, 1% dividend, and 3.5% from the option position. As usual, trades work out well with any trading strategy when the position is entered near the bottom, but this trade actually underperformed the SPY over the same period and other trading strategies could have returned more. Still, hard to be too upset by a 7.8% return while having a hedge in place for most of the time.

Going forward, I'm still generally positive on nyx. It is a different way to get exposure to financial markets and fundamentals are reasonable. Earnings announcement is 2/8, and options volatility is still fairly high. Might consider re-invsting the profits from this trade back into the stock on a pull back.

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