Well, several options expired today. They include OPEN, FFIF (I have several options with different expiries) and SLW. How am I going to replace these expired options?
- OPEN. I sold a portion of OPEN at ~80.30 (broke even) to provide funds for FFIV position. I intend to sell calls against my OPEN shares at the strike of 80, exp. Oct. 2011, for $7.25/sh (Friday’s prices). This will effectively bring down my OPEN cost further to 73.05. $7.25/$22.32 (maintenance required for each share of OPEN) = 32.5% (return in 4 months).
- FFIV. I also intend to sell Oct 2011 105 call at $8.4 (Friday’s close). I wrote a covered call (cost $102.98). For this batch of purchase, if I can write a call to replace the expired call for $8.4/sh, it will bring my cost down to $94.58. $8.4/$29.16 (maintenance requirement for each share of FFIV) = 29% (return in 4 months). I am still net short FFIV. I have short calls at 97.5 and 100. I’d like to add more short calls at $105.
- SLW: After the options expired, I am left net long SLW (cost $34.7). I intend to sell call at Dec. $33 for $3.2. This will bring down the cost to $31.5. The ROI of this trade is 10.5% (for 6 months).
