Tuesday, April 12, 2011

WNR - covered call

Bought a covered call on WNR. In the morning WNR went down quite a bit(< 17).
The APR18C which will expire in few days went down quite a bit too.
I used this call to buy the covered call. The call portion of it, I got it for $.12. 

It did not reduce my cost much, but immediately and hopefully paid my commisions on this trade.
If this call expires I will sell MAY18C on Monday. I think the APR18C will expire.

If WNR shoots past 18 and I get called I will make $85. Lets see.

WBT BOT +1 COVERED WNR 100 APR 11 18 CALL/WNR @17.14 ISE
Commision: $5.00
Cost: $1,714.00

The whole theory behind this trade is the crack spreads. They are very high right now. This is when refiners make most money. WNR is a very good long trade for the next two months.
http://www.bloomberg.com/apps/quote?ticker=CRK321M1:IND

4/19/11
Unfortunately WNR was getting called away. So closed the position manually. With my broker, if a CC is called, the commision is steep($15).
WBT SOLD -1 COVERED WNR 100 APR 11 18 CALL/WNR @17.98 ISE
After commisions made $74. Not bad for a position held for less than a week.

Opened another CC position on WNR on 4/18/11.
WBT BOT +1 COVERED WNR 100 MAY 11 18 CALL/WNR @16.35 ISE
Cost: $1,635.00
Commision: $5
Should have gone for May19 call. But always looking to reduce my cost basis and do CC with ITM options.
If called, I will make a tidy profit for month hold. If call expires, I make $111.

05/04/11
Bought back the MAY11 18 call for 0.05. Looking for a spike in WNR to sell another 18 call(maybe MAY or JUNE).

05/09/11
5/9/11 WBT SOLD -1 WNR 100 MAY 11 18 CALL @.25 CBOE -1.5 25.00

     Expired.

05/23/11
WBT SELL -1 WNR 100 SEP 11 18 CALL @1.10 LMT GTC CBOE
9/19/2011

WBT SOLD -1 WNR 100 OCT 11 16 CALL @1.40 CBOE ($1.50) $140.00

Sold another call. Effectively long 100 shares of WNR at 13.6. with no upside after 16.
9/19: I think WNR will be in sideways action for sometime to come. This is the reason for selling 16C instead of 18C.

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