Have you been following my posts lately on my “ill-fated” trade STOJY7 – the covered call I did about 6 weeks ago. I’ve put that trade on when STO was at 12.45 expecting that the market will fall due to the debt problems in Greece, and their European cousins.
With the 85c premium I received for STOJY7, the strike price is $12, so my breakeven is at $ 12.85 (excluding fees). If you missed some of my posts, what happened was, the market did not have a grand fall as expected, but as part of the plan 🙂 I protected that covered call with a “buy call” strategy when the price started moving up (while keeping the STOJY7). In short, I used 7.5c from that 85c and made 60c = my “ridiculous” 800% profit or 8R trade.
However, against my wishes, STO moved up further up to 13.70 level. I told you about how laughable that is, with the uncertainty in the financial markets, but hey, this is no Cinderella story and there is no magic wand to wave people to wake up to reality. STOJY7’s value went from 85c to around $1.40, I didn’t even want to look at it. LOL
Anyway, after the “bailout party” the market went on a gradual slide again (*as I thought!). Today, I am facing STO at 12.76– STOJY7 call option is expiring on Thursday so before someone exercises the option against me (meaning I will be forced to sell it at $12) I bought it back today to close at 83c, back to black right at the clock. 🙂
I’m free to write another covered call on STO again. Just you wait.
(Posting the statement later, my broker doesn’t send it till early morning the next day).
