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Post by cosmic on Aug 12, 2010 12:03:31 GMT -5
Sold the JAZZ 12.5 calls just now for .46, bought at .25. The chart seems stable here, but those calls, especially being OTM, are very likely to suffer some whiffle if we don't get another push right away. All of the JAZZ calls and puts have a lot of August TP left in them so it will be interesting. Still holding JAZZ at 9.27, JAZZ short $10 calls at 1.06, and JAZZ short $10 puts at $1.00. Here's the current expiry curve:  Uploaded with ImageShack.us |
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Post by benvestor on Aug 12, 2010 13:54:47 GMT -5
Nice pick up on Jazz cosmic.. are you more bullish or bearish biased in your hedge?
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Post by cosmic on Aug 12, 2010 14:32:28 GMT -5
The position I'm in here prefers a close above $10 on Opex, and allowing the short puts to expire OTM, the 10 covered calls will be ITM, and will be offset by my shares at 9.27. Net profit is $1 + .73=1.73/share.
Should we close below 10, the short puts would be ITM and I would fill at 10-1.00=9.00 adjusted net with those shares. The 10 covered calls will be OTM and I will keep the entire 1.06 premium and all the shares at 9.27 for a (using above ratios) average of 2000 shares at around 9.13.
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Post by cosmic on Aug 12, 2010 14:40:49 GMT -5
I am incorrect on the above computation if we close below 10. (Will use above ratios, my trade size is different.)
If we close below 10, the short puts would be ITM and I would fill at 10 with a $1 premium so 9 on an adjusted net for 1000 shares. The 10 covered calls will be OTM and will keep the 1.06 premium against the shares at 9.27. Thus, that 1.06 goes towards reduction of the basis of the 9.27 shares, lowering them to 8.21/share on 1000. So (9+8.21)/2= 2000 shares at a net basis of 8.60.
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Post by cosmic on Aug 12, 2010 14:45:04 GMT -5
Ok now I hope we close below 10 lol
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Post by cosmic on Aug 20, 2010 20:34:50 GMT -5
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Post by Rich on Aug 20, 2010 20:49:41 GMT -5
Way to go Cosmic trader dude.
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