Sunday, July 14, 2013

Closed Position in QQQ and Covered Call

The Index Covered Call (aka: ICC) trading plan 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. 

UNDERLYING ETF: QQQ 

DESCRIPTION: Power Shares NASDAQ 100 

TRANSACTION TYPE: Close

DESCRIPTION:   The Nasdaq had a nice rally the past week pushing the ETF well above the strike place of the covered call held in the portfolio. Given this situation CCI closed the position on Friday as described below.  This position was established on 5/29. Over the approximately six week holding period the position returned a modest 0.7% return while the index itself returned 2.6% over the same period. Not a great result.  However, this is consistent with expectations for this approach of under performing in an up market. At least the approach continues to grind out positive returns. CCI anticipates re-establishing this position in the upcoming week. 

TRANSACTION DATE: Fri. 7/12/13

Action: Buy to close
Strike: $72

Exp. Date:  July 12, 2013

Price: $3.00
Action: Sell QQQ

Price: $75.19



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