Rolled EEM Calls.......Again

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. 

 UNDERLYING ETF: EEM  

 DESCRIPTION: iShares Emerging Market Shares 
 

TRANSACTION TYPE:    CCI harvested some option premium and re-establish the covered call position as described below.

 

TRANSACTION DATE: Thur 11/25/13 

 

Action: Buy to Close

Exp. Date: Nov.  29, 2013

Strike: $42

Price: $.14

 

Action: Sell to Open  

Exp. Date: Dec. 6, 2013 (one weeks out) 

Strike: $42

Price: $.36

 

Net Debit: $.22 after commissions

Re-established Covered Call in Emerging Market ETF (EEM)

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. 

 UNDERLYING ETF: EEM  

 DESCRIPTION: iShares Emerging Market Shares 
 

TRANSACTION TYPE:   The emerging market ETF (EEM) stopped its recent downward slide today, and CCI used that move to harvest option premium and re-establish the covered call position as described below.

 

TRANSACTION DATE: Thur 11/14/13 

 

Action: Buy to Close

Exp. Date: Nov.  16, 2013

Strike: $44

Price: $.01

 

Action: Sell to Open  

Exp. Date: Nov. 29, 2013 (two weeks out) 

Strike: $42

Price: $.25

 

Net Debit: $.23 after commissions

Re-establish Short Call in C

As discussed here CCI has a long position in the financial sector etf (xlf) via the Jan 15 $10 Call, that has usually been hedged via a shorter duration short call in Citigroup (C).

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. 

Note: C reported earnings and they did not seem to push the stock higher. This reduces the volatility/risk of the short call. As the price of the option decays look for CCI to close or roll this position relatively soon.

Rolled Small Cap Covered Call Out & 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. 

UNDERLYING ETF:  IWM

DESCRIPTION: iShares Russell 2000

 

TRANSACTION TYPE: Roll Out and Down

Small cap stocks stopped their torrid pace recently and CCI was finally able to harvest some option premium as described below.

 

TRANSACTION DATE: Fri, Nov 18

Action: Buy to close

Exp. Date: Nov. 16,  2013

Strike: $112

Price: $.04

 

Action: Sell to Open

Exp. Date: Dec 6, 2013

Strike: $110

Price: $.86

Net Credit/Contract after commissions: $.81