Patrick's Rants


HMY Call Closed

Filed under: Money,Stocks — site admin @ 11:13 am

The 9.00 January calls in HMY were hovering close to $0.05 and since I can buy to close, or cover, with TD Ameritrade for no commissions when the options are a nickel or less I placed an order good for the day on Friday. $5.02 (exchange fees are always added) later and I have closed the call portion of my HMY position.
As I previously wrote, gold is a volatile holding and stocks do what stocks do. I don’t have a crystal ball, but do expect more volatility in my gold stock holding and look to sell the 9 call again two to three months out, this time for more than the $0.39 I got on the last roll.

The recap for HMY return on the call only sold for $0.39 and bought to close at $0.05. To be as fair as I can with this transaction I’ll allocate about half of my commissions on the buy-write to the calls (although I was only charged $0.78 for this part of the trade, it would have been more without the “buy” side). So $34.00 – $5.02 is 577.29%. Annualized it’s a ridiculous 305,699%. Let’s be a little more down-to-earth. I bought this stock because it had a great return as a buy-write stock. The total investment which includes my initial purchase and the closing transaction is $814.01. I received $38.22 for the call option for a three month return of 4.7% – annualized it’s 18.8%. Not the ridiculous number from above, but still a decent return.

Hey, this is what I’m doing in my own account. I’m posting it for entertainment and educational purposes only. Do your own due diligence.

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