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MBIA Inc (MBI) and put selling

After reviewing my current position with MBIA (MBI) I decided to take another trade with this stock. I already hold 100 shares of MBI and have a covered call written against this stock, see my previous trade here.

This trade went bad originally and I was double guessing it whether it was a good joice buying this stock. It was fighting with Bank of America over some insurance claim issues, where MBI claimed lost money insuring some faulty notes issued by BAC and BAC knew that the notes were bad. Well, at the time prior to crisis, everybody did it actually.

It looks like MBI is going to be paid some compensation in a settlement and thus we saw this stock soaring last couple of days.

I am going to take the advantage of this movement, and tomorrow I will sell a put against this stock. I was able to find a nice premium for quite low strike ($9.00) at 1.18 ($118 total premium), so if the stocks stays where it is now or even goes higher, I should keep the premium and maybe repeat the process.

If the stock falls below $9.00 strike, which can easily happen, I am OK to get assigned to the stock and immediately sell it or sell another covered call against it.

Let’s see tomorrow how the trade executes.

2 responses to “MBIA Inc (MBI) and put selling”

  1. admin says:

    Marvin, some bad trades turn into good ones and favorite ones. I believe, this should work well, but time will say.

  2. I like this strategy I believe you will be successful with this!

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