Frankly, CCI has done this so many times that I've lost count. Usually the puts have expired or a small profit from option premiums have been taken. However, the July $13 puts ended up being assigned. A scenario for which a put seller always needs to be prepared. With the credit for this put sale the stock was acquired at an effective price of $12.51 at July expiration.
With GLW trading back over $13, CCI now switched the strategy and sold the $13 Oct calls against this position for $.40. Three scenarios
- The stock falls back well below $13 fairly soon - Oops, not good, but CCI will harvest a great deal of the option premium and re-evaluate next steps.
- The stock will hover just below $13 - The option will be held until October and expire. The effective cost basis for the holding will be down to $12.11, and CCI will likely look for opportunities to sell calls again.
- The stock will stay above $13 through October - The stock will be called away. CCI will take the 7+% over three months gain ($13.40 - 12.51) and redeploy the capital.