With financial stocks rising, CCI decided to re-establish a short call in Citigroup as a hedge against the long. leveraged position in XLF held in the portfolio. Specifically, with C pushing through $50, CCI sold the Dec 21 $52.50 call at $.44
Since inception on Jan 8, the performance of various potential holdings as of the time of this trade are shown below:
- The XLF etf continues its excellent performance up 23.2%! That is comprised of 21.9% unrealized cap gain, and 1.3% in dividends.
- The leverage obtained by instead simply holding the Jan 15 $10 call has generated and unrealized, leveraged, capital gain of 53.7%. (leverage is great when it works!!!)
- The leveraged, long/short strategy defined in this thread is up 49.7%. That is comprised of 36.6% in unrealized leveraged capital gains, 13.1% in realized option premium. The short call position described in this post provides about a 4.7% hedge/option premium opportunity.