01/11/2010 – Margin Portfolio – Alcoa Short Position Adjusted

Alcoa earnings is just a 8 hours away & the stock just passed 17.50.  This is painful to watch, especially since we’re short the 17.50′s & 16.0 callers but we believe the stock will finish at or below 17.50 by Friday; therefore we’re going to ride out the earnings play by using a back/ratio to move our JAN16 up to the 17.50′s.  Just remember, Alcoa has already went up a nice 15%  since our original trade on DEC 22nd; so it’s doubtful they will pop more 10% tomorrow morning. However if they do, then we expect to see some profit taking by Friday’s Option Expiration.

Filled Order:

SOLD -2 1/2 BACKRATIO AA 100 JAN 10 16/17.5 CALL @ -.33 (debit)

Position: Our Margin started out at $671, but now we’re at $3300 just to try and save this trade!

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