Tuesday, April 16, 2013

Rolled Bond (TLT) Covered Call Out and Up

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page.

DESCRIPTION: iShares Barclays 20+ Year Treasury Bond
TRANSACTION TYPE: Rolled Apr $119 Covered Call to May $120 Call
TRANSACTION RATIONALE:  As discussed  here another covered call candidate is the long term bond ETF.   US treasuries have been rising on a flight to quality.  Hence, this covered call was rolled at a loss as described below.
TRANSACTION DATE: Tues.  Apr. 16, 2013
Action: Buy to Close
Exp. Date: Apr. 20, 2013
Strike: $119
Price: $ 3.03 
Action: Sell to Open
Exp. Date: May 18, 2013
Strike: $120
Price: $2.73
Net debit: $0.35/contract after commission

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