Sunday, June 30, 2013

Rolled EEM Covered Call Out and Down

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 Emerging Market Shares
TRANSACTION TYPE:  Roll Out and Down
Emerging market stocks continue their swoon, and hence the June 28 $40.5 options became essentially useless as a hedge.  Late last week CCI closed that call for $.01 and a gain of $.27/contract.  At the same time CCI re-established a covered call as described below. 
Action: Buy to close 
Exp. Date: June 28, 2013 
Strike: $40.50
Price: $.01
Action: Sell to Open  
Exp. Date: July 5, 2013 (one weeks out
Strike: $38
Price: $.31
Net credit/contract: $.29 after commissions

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