My CRM (now at $57.17) short call of $43.75 (part of the covered call) contracts are due to expire this Friday. CRM’s 200 day MA is ~$47. Since 43.5 is too deep ITM, I want to raise the strike price to produce more time value but still within safe limits (below $47, the 200 day MA, in this case). So I bought back 43.75 call (Jan. 18th, 2014) and sold equal number of Jan. 17th, 2015 $46.25 for -.78/sh. If CRM stays above $46.25/sh by Jan. 17th, 2015, my gain is 25%/yr for my investment. This trade is also quite safe (see chart below).
About admin
Richard Cheng, M.D., Ph.D., is an avid Wall Street investor with 20+ years of investing experience. He is specially adept at observing the world to find the patterns and then design strategies to win his battle. Most, if not all, happenings in the world, follow certain patterns. These patterns may be complex, multi-factorial, not so intuitive at the first glance, or even may appear chaotic. However, even chaos has its own patterns. If you pay attention and be patient, you'll find them and then you will gain an upper hand in your battle. Using this blog space, he documents his trades and his thoughts as they happen. He uses this blog as a a notebook to help him better refine his strategies. Hopefully this will help you as well. Good luck in your trading.
