Save 15% on H&R Block At Home Products Deluxe



Trade Adjustment – 8×8 Inc. (EGHT) new covered call

Last Friday (05/17/2013) was the last trading day before options expiration day. I had two options in play for this month. one of them was a covered call for EGHT. This stock broke above the strike price for several times before expiration, but at the end ended below it, so my covered call expired worthless.

Originally I wanted the call being assigned and have the stock called away to free cash I have in this stock, but I am OK with this outcome as well. Not only I have realised 100% profit on my original trade, but today morning I could sell another covered call improving the profit of the entire trade.

By expiring this call I could keep $45 premium (6.3% gain, 29.5% annualized return).

You can review my original trade in the “New Trade – 8×8 Inc. (EGHT) covered call” post.

As you may see in my original post, if the stock got called away, this trade would ended up with 13.72% gain.

It didn’t happen and I could sell another covered call today.

Trade Detail

The trade got executed this morning at opening and I collected $100 premium for this stock improving my trade:

05/20/2013 09:30:00 Sold 1 EGHT Nov 16 2013 7.5 Call @ 1

 

Own 100 shares EGHT: $6.79
Strike: $7.50
Sold 1 Covered Call: $1.00
Total Purchase: $100.00
Commissions: $8.78
Total purchase: $551.56
Expected Option Assignment: $750.00
Option Assignment Fee: $19.00
Expected Proceeds: $731.00
Expected Net Gain: $179.44
Expected ROI: 32.53%

I am excited how this trade perform so far. Let’s see where we get this trade in Novemeber.





Leave a Reply

Your email address will not be published. Required fields are marked *