Rolled Short Call in C, Out and Up

As discussed here, CCI has a long position in the financial sector etf (xlf) via the Jan 15 $10 Call, hedged via a shorter duration short call in Citigroup (C).

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As discussed in this March 14 post CCI rolled out the short position in C with that hopes that a little more duration would allow noise about the stress tests and capital plans of the banks to settle into the market, and potentially cause a small pull back in C.  Not sure if that thesis was right, but then along comes the "Cyprus crisis". This seems to cause the bank stocks to gyrate.  This created the opportunity to roll the short side of this trade. On Monday, CCI rolled the March 28 $44 call to the April 12 $44.5 call for a $.23/contract credit.  FYI, C reports earnings on Apr 15.

Since the position was established on Jan. 8 the approximate performance numbers are

• 6.6% - simply holding xlf
• 14.8% - holding the Jan $15 Leap (due to the increased risk/reward of the leverage)
• 11.9% - the combined position described here

Currently, this position is providing a nice balance of leveraged returns with some downside hedged protection. There is plenty of time left on the position (Jan 15) to see how it evolves.