Today is the last trading day for the weekly expiring options. I did the following trades.
- SLW. I bought SLW 2 days ago and wrote calls with a strike of 39. Today SLW is above 39. I like SLW and want to continue to hold these shares. So to prevent my SLW shares to be called away, I bought back the options (strike 39, cost $1.6/share) and sold equal amount of contracts of SLW options with a strike at 39 (profit: $2.13/sh) and expiring next week (this is called a calendar spread). Net profit for this trade: $2.13 – $1.6 = $0.53/share (or 4.9% return on investment in 1 week).
- I also rolled up my earlier SLW covered (strike 38) to next week. Net profit: $0.35/share.
- FFIV.
- Added more FFIV shares using the profit income due to roll ups (one example of how to increase your portfolio size).
- MCP. I rolled up MCP options (strike 50) expiring today to Oct (43 days to expiration), to a higher strike (52.5). Net credit is $1.15/sh. Plus the $2.5 higher strike (higher profit, if MCP stays above $52.5/sh by Oct expiry). Net profit of this roll up is $1.15 + $2.5 = $3.65/sh. The total profit / margin requirement x 100% = 23.17%. In other words, if MCP price is above $52.5 by Oct. 22, 2011 (43 days from today), my return is 23.17% in 43 days (or 197% annualized return).
- BIDU. I also rolled up BIDU.
