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Options Expiration – November 2016

Friday, November 18, 2016 14:59
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My only November option left to expire was the an IWM covered call. I could’ve let it expire and be called away. That inaction on my part would’ve saved me $2.38 in commission for this trade, but the data entry is easier this way in Quicken and I decided my couple of minutes saved is worth the commission expense.

While IWM was trading at $130.70, I sold 100 shares of IWM and bought one IWM November $123 covered call for a net price of $123.00. I received $12,297.62 after paying $2.38 in commission. It’s a shame I had to pay $7.70 to buy the $123 covered call since I could’ve bought it before the election for less than $0.20. I almost placed the order on Friday before the election, but decided I didn’t need to for two reasons. I’d save $20 by letting it expire worthless when I didn’t think there was a 1% chance that IWM would climb more than $7 in two weeks to be assigned. I also was long 200 shares, so I figured if I was wrong, at least the other half of my IWM holdings would gain, which it did very nicely. A $7 gain only took a few days and IWM broke above $131 this afternoon, up more than $15 in two weeks.

As my account takes another step towards a clean slate, I’m already considering my next steps for IWM. I think I’ll probably sell another covered call on my remaining 100 shares that I’m long and will also sell a naked put to give me some extra upside, but with a cushion. I’m very happy I procrastinated on my MDY and DIS covered calls, but it might be time to get off the non-option ride with these two and sell some covered calls. Then again, maybe I should wait out December to see if this rally can continue. Another decision that’ll wait until next week.


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