I closed this trade on August 23rd. I was nervous about the market. It could have broken down.
Fortunately, the market withstood the support and rallied.
I mentioned I will get back to the trade.
I like the fundamentals of this company. It was explained on my previous post: http://zpring.blogspot.com/2010/08/xec-covered-call.html
Today, I see a good set up for the trade. Price has tested support and rebounded. It may test 64 again but there are good support at around 63-64.
Trade:
Buy stock at : 66.95
Sell Sept 65 SC at 2.55
PE: Let SC goes ITM and call out the stock. I will make 1% in 2 weeks. I may roll out the SC before expiry if I remain bullish on the overall market.
SE: If the stock breaks down below 65, roll the call to Oct 65 or lower.
Posts
This trade is going nicely.
ReplyDeleteToday, news that transocenan (RIG ) may settle with BP for $1-$2b liability send oil driller stock higher.
I believe XEC will outperform compared to the others.
I have decided to move the ITM Oct 65 SC to Oct OTM 70 SC as a bullish adjustment.
Trades:
BTC Oct 65 SC for 1.65
STO Oct 70 SC for 2.55
This brings the cost basis for the trade to :
66.95-2.55+1.65-2.55 = 63.5
September 10, 2010 3:38 PM