Walmart

Walmart(WMT) is down about 4% after their earnings this morning. Still not quite a screaming value at $60/share, but I am going to take advantage to sell a put.

• Sell to Open: 1 WMT Jan 19 2013 55.0 Put @ $2.50

This will work out to 25% in just under a year. Worse case scenario, I buy WMT at $52.50 and collect dividends and sell covered calls on a rock solid company.

The Numbers

• Cash: +$250
• Short Option: -$255
• Margin: -$1000

Out of NETL

Gonna go ahead and close out the NETL arbitrage trade this morning for a nickel. This option didn't expire until April, so there was no point in tying up the margin for an extra $5.

• Buy to Close: 1 NETL Apr 21 2012 49.0 Puts @ $0.05

This trade produced nearly 15% on margin in just 4.5 months.

The Numbers

• Cash: -$5
• Short Option: +$5
• Margin: +$1000

Gold Update
My DGP gold position has been flirting with it's trailing stop the last couple days. If we don't get a bounce this afternoon or tomorrow it will likely break it's trailing stop(currently $56.53) and I will close the position.

Out of MSFT

The naked call I was holding against my Microsoft stock was exercised early(most likely someone chasing the dividend since yesterday was the ex-div date). Anyway, instead of trying to get back into this right now I'm just going to take my profits on this one and wait for a better chance. The option was exercised at $30 so that's a total capital gain of $4.59/share(18%). Additionally I received another $0.52/share in dividends and $0.42/share in option premium(that's including the $0.46 I lost when the shares were called away and I rebought) for a total gain of 21.8% in about 9 months.

• Sell 100 shares of MSFT @ $30.00

The Numbers

• Cash: +$3,000
• Long Stock: -$3,025
• Short Option: +$35

I will try and get back into MSFT if it drops back down in the next couple weeks.

Rolling, Rolling, Rolling

Haven't been very active lately, but I am going to go ahead and roll out the MSFT calls from last week another week. With so little volatility, there wasn't much premium and they barely covered commissions, but I don't want to dump the stock yet.

• Buy to Close: 1 MSFT Feb 10 2012 30.0 Call @ $0.52
• Sell to Open: 1 MSFT Feb 18 2012 30.0 Call @ $0.56

The Numbers

• Cash: +$4
• Short Option: -$4

Hahahaha...Bite me MSFT!

Isn't that awesome! Once again Microsoft is running higher and my greed yesterday is going to bite me again. This time it was the employment report this morning. Might be time to lay off the covered calls until this bullishness in the markets fades a little. If the calls I sold yesterday are still in the money towards the end of the day I'll roll them forward a week or so. I'll update this post if I do.

Update: I rolled the MSFT calls out one week on Friday afternoon.

• Buy to Close: 1 MSFT Feb 03 2012 30.0 Call @ $0.28
• Sell to Open: 1 MSFT Feb 10 2012 30.0 Call @ $0.44

The Numbers:

• Cash: +$16
• Short Option: -$16

More MSFT Calls

A couple weeks ago I got a little greedy with the Microsoft covered calls, but I'm going to try it again.

• Sell to Open: 1 MSFT Feb 03 2012 30.0 Call @ $0.11

MSFT closed the day just $0.05 away from the $30 strike, but I feel that Microsft(and the overall market in general) is a little stretched to the upside and due for at least a pause. These expire tomorrow, so even if it jumps a bit tomorrow, it shouldn't run up too much and even if the option gets exercised, it should be minor. Last week, even with earnings giving the stock a huge boost, it was still only a minor loss.

The Numbers:

• Cash: +$11
• Short Option: -$11

MSFT Update

The other option expiration update I had was the Microsoft covered calls. This one wasn't as simple. The market love MSFTs earnings last week and the stock price raced up past the strike price Friday morning. I had a chance to close the call at breakeven early in the day, but decided to put in a limit order and let things play out whichever way and deal with it today. Well, MSFT kept plugging higher all day and the stock got called away at $29. Since I wasn't ready to end this trade yet though, I repurchased the stock this morning. Luckily MSFT has been dropping today and I was able to repurchase at $29.46. With the $0.14 option premium on the latest call, that means I'm only missing out on $0.32 share. Not what I wanted when I sold those most recent calls, but that happens with covered call positions sometimes. I am going to continue to track this as a single trade.

• Sell 100 shares MSFT @ $29.00
• Buy 100 shares MSFT @ 29.46

The Numbers

• Cash: -$46