Monday, May 13, 2013

Markets Upward Movement Forces the Roll of SPY Covered Calls

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.


TRANSACTION TYPE: Roll the May $158 call to the June $165 call
TRANSACTION RATIONALE:  The S&P 500 continues to climb upward making the covered calls a drain on the overall portfolio return.  With the hint of a pull back late last week CCI rolled the covered call position up and out as described below. 
TRANSACTION DATE: FriMay. 10, 2013
Action: Buy to Close
Exp. Date: May. 18, 2013
Strike: $158
Price: $5.49
Action: Sell to Open  
Exp. Date: June 22, 2013  
Strike: $165
Price: $1.67
Net debit: $3.91/contract after commissions.

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