C's stock price dropped today (allegedly on rumors of potential poor trading profits). The price drop made the short call essentially useless as a hedge so CCI closed the covered call position at $.07/contract after commissions. CCI will be looking to re-establish this type of position factoring in the potential volatility in the stock around Oct 15 earnings.
Since inception on Jan 8, the performance of various holdings are shown below
- The XLF etf has slumped a little over the past weeks but is still up 18.8%! (including dividends)
- The leverage obtained by instead simply holding the Jan 15 $10 call would have returned 43.4%.
- The leveraged, long/short strategy defined in this thread is up 41.9%.