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