Hence, this morning CCI sold Jan $42.50 calls against one lot of the stock in the portfolio for a credit of $.80. The stock continued to move up during the day and an investor could have gotten a much better price or moved to the $45 strike. Two scenario's
- Today's positive move was indeed an over reaction, and the stock will pull back in the short-term. In this case CCI will look to harvest some premium and potentially roll this same call out t a future month
- The stock stay here or rises. In this case one lot of share will be called away at an effective price of $43.30, and the other two lots in the portfolio will continue to enjoy the ride.