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Another Option Expiry came and gone. Covered Calls Trading is bullish strategy. Guess what I was experiencing? You got it! Most of my positions were facing downward pressure, not pretty.

I said most of my positions because one position, Rent a Center, INC (RCII) to be exact was doing too well! Too well, what do you mean?
Those of you read about my RCII problem from my previous posts might recall after I sold 5 contracts of RCII $20 Puts, the share price suddenly dropped $2 to about $18 and threatened to keep on dropping to oblivion. My long put insurance saved the day though, and my loss would always be limited and several times I was tempted to exit the position entirely for a small loss.
Reluctant to face certain loss kept me in the position which could finish up in June when the insurance will expire, forcing closure of the position at a bigger loss. Decision! Decision!
My decision was to hang on. Right now, the positions look like this:
Short 5 RCII March $20 puts
Long 5 RCII June $20 puts

The twist was RCII shares slowly recovered and then hovered around $20 mark which was exactly how I liked it. I must have upset someone overhead when I celebrated too loudly! One day RCII suddenly jumped $2 to around $22. As an investor I have to protest vehemently! Why, because now I am gradually losing premium of my $20 put insurance prematurely. Why is my porridge’s temperature never just right? Lament a disgruntled investor!
Actually, if my closed my June puts and wait for my March put to expire worthless, I should achieved a small profits. But, as soon as I closed the long puts, I bet RCII will drop below $20 again, where will I be then?

No, I am hanging on, till March expiry at least. Let’s see what will happen!

Chunghwa Telecom Co. Ltd. (CHT) decided to do some re-organisations. I was not able to find out a lot about it. What happened did cause havoc to my CHT option trades. There has been no demand for both short call and put options at all. The final result of this trade is not going to be pretty, certain loss to be sure, but it should be limited though. A bit of tweaking of the strategy is called for.

As for the other positions of Yamana Gold Inc (AUY), iShares MSCI Canada Index fund (EWC) and the iShares MSCI Hong Kong Index Fund (EWH), several months of downward pressure rather killed off demand for call options for all of them.

After expiry, I just managed to sell the EWC March $17 call for $0.35. This should mean the bottom line of the EWC trade is going to be a tiny overall profit when the position closed at the March expiry. Right now I am long 5 March put and short 5 March call. My EWC shares will either be called away or I will exercise my long put contract, either way, the shares will be sold for $17. I calculated there will be a tiny profit of $85 for an outlay of $13500 for five months. This will be annualised to 1.6% hardly something to shout about. The main reason was EWC shares price hardly rise above $26 for the last few months so no demand for the $27 call, but loss of the position was always minimized.

Prospect of EWH is less sound and very unlikely to end in profit in June unless unexpected recovery to near the $16 level soon. Right now I could not even sell the April $16 call for anything worthwhile, the March $16 is on offer for $0.05. I will forgo the vacancy of this month unless there is change in the next few days.

AUY is looking to be very sick. It became a long term hold situation. I will sell the AUY $14 call whenever I can obtain a decent premium. There is a cushion of $2.15 per share profit from previous closed Covered Calls receipt. Hopefully it would be enough to help keep the nerve sturdy. Other than that, I have to rely on the yonder hills to have tons of Gold, Amen. I am also praying for AUY shares to stay above $11 at least until gold price revives! Oh dear! Owning shares without insurance is just not good for the nerves!

In my Forex Expert Advisers (EAs) evaluation front, one EA did not trade during last few days, but the other showed its virtual gain increased to $10000 to $12500! It is very early days!