Well I should've set this up a couple days ago with DDD before the ER, but I wasn't really paying attention. (That's what happens when you have a full-time job and do THIS on the side.) Anyway, today I sold to open a May $55 call against my 100 shares of DDD. I have absolutely no faith this stock gets to $55 in two weeks. I'm simply putting this on to pocket the measly $17 premium I collected after commissions. Hey folks, every little bit adds up! And if, IF - DDD gets to $55, I'm out of the shares for $100 gain AND freeing up capital in the process!
The bottom line is this people, I'm underwater on my DDD shares and I expect to be for a while. So I'm going to fight and scrap to lower my cost basis to the best of my ability. I'm currently in @ 53.97, and after this trade my new basis will be 53.80. I figure each month I can continue to chip away until the stock bounces back and I get profitable. It's just going to take patience!
Moving on to FB... I was THIS close to selling out today. I bought 100 shares two days ago playing for a swing back up to the $60 range. Well, today we got damn close, but instead of selling my shares I decided to sell a weekly $60 covered call! Since my plan was to sell at $60 anyway, why not get a little additional premium as well.
The way I see it, 1 of 2 things will happen. First, the stock keeps going up and my shares are called on Friday. If that happens I'm booking a $386 profit or a 6.8% return in a week! Hey I can live with that! On the other hand, the stock pulls back BELOW $60 and I keep the premium thus lowering my cost basis. PLUS I still own shares in a profitable, high-growth company!
I'll be happy with either result!