Wednesday, November 16, 2011

HPQ - Closed Nov Option Position

With HPQ trading back near $28, option expiration on Friday, and earnings on Monday,  CCI unwound the November option position.  To remind readers of the specifics, that meant selling one lot's worth of the $24-$28 call spread and rolling one lot's worth of the $28 covered calls from Nov to Dec.  After commissions those trades resulted in a gain of $3.08/share.  A very nice gain, that proactively puts a little bit of a dent in the overall loss on the HP trade.

Earnings are Monday.  In a perfect world, a new CEO (Meg W.) would like to report in-line quarterly results (i.e. things are under control) and manage down expectations for the future (i.e. it will take me a little while to repair the damage of the past.)   I think it unlikely that a new CEO in their first quarter on the job will increase expectations.  Hence, I'll keep betting HPQ will continue to range bound in the high $20s for awhile.  The lot of Dec $28 calls are in the portfolio to try to make some shorter term profits from that scenario. 

After the earnings report, the x-date, etc we will reevaluate the next steps with this trade.

No comments:

Post a Comment