Alpha Natural Resources (ANR) was up a "modest" 14 % today to nearly $24. Of course that is after an even larger percentage fall the weeks prior. Yet another example of "rationale/efficient" markets.
Readers will recall our last activity in this stock was to establish a Nov $23-$25 1 by 2 ratio call spread for no cost against one of the lots of stock held in the account. If you need a refresher on that activity it is documented here. The stock had bounced back nicely towards my price target of $25-$26. It looked like this strategy had worked perfectly. However, the stock reversed right before expiration, and the trade expired with no impact on the p/l. Rats.
With today's gain and my calculations of adjusted, tangible book value still over $25, CCI put on the same trade for December options. Specifically, bought 1 lot of Dec $23 calls and sold 2 lots of Dec $25 calls for a net debit of $.09 after commissions. Obviously we need the stock to stay over $23 to make money and the best case is for it to climb over $25. With the way this stock moves that can happen very quickly.