My Options Trades this Week
In my last post, I updated many of the changes that had occurred in my positions due to options expiration last Friday. Well because of those changes, it has been a busy week and I have had a lot of additional adjustments happening so I thought I would make a few comments.
As you know, my position in Silver Wheaton (SLW) was sold due to the exercise of the April $30 put options. I bought back one-third of that position at $28.50 plus a few more shares at $28 snagging a significant discount. Now I went ahead and sold some May $29 calls for $1.25 per share meaning that I will have made the $1.50 discount on the repurchase, $1.25 on the premium, but lost $1 for selling at a lower strike. However, the net will be $1.75 per share profit provided that the stock gets called away.
Yesterday, I was able to buy back the next third for $29.90. I still have the stock uncommitted so I could sell some additional calls. Gold and silver are up a little this morning. I suspect the weak GDP number means that traders are thinking the Fed might have to get more active in trying to stimulate the economy and inflation expectations down the road have been heightened. Who really knows? I will keep trading my system month to month. Right now, I am working on decreasing the basis in SLW so any shares that I add will do just that.
Do to the discount that I got in the repurchase and cash from selling calls, I think I might be able to add some shares to be ready for the next upswing. As I work out my position in AKS over the next few months, I want to use those funds as well to add additional shares of SDRL and SLW.
This has been a big week in Onyx Pharmaceuticals (ONXX). Buyout rumors caused the stock to pop over 8% on Wednesday. I ended up buying back some May $40 calls that I had sold as well as some May $42 calls. I then sold some May $45 calls and plan on selling some $47 calls when I can. Unfortunately, yesterday was sideways and today is looking somewhat weak to start out. I may just buy some put options to protect some of the gains and see what happens. I would hate to not be able to take advantage of a nice little spike, but if the rumors dissipate then the stock will languish for sure.
Other Calls That Were Sold on Strength
I also managed to sell some SDRL May $38 calls, STX May $30 calls, and INTC May $28 calls on strength yesterday. I had simply placed some good-til-cancelled (GTC) limit orders earlier in the week and they happened to all hit yesterday. It was definitely a good thing with STX since it looks to drop about 8% today. Let me tell you, volatility can be crazy sometimes which is why I have many protective puts since it is impossible to know how the market will react.