15.28 (-0.21)

02/18/2010 – ThetaOptions Margin Portfolio – Closed Trade – Profit $350

Ok, that was fun. We bought back the last lot of our naked callers this morning and successfully shorted UAUA again. That’s THREE successful missions on shorting them over the past four months. Our profit this round was $350, and we made some adjustments by leaving our original short strike while the stock was rising during the madness. We still can’t believe the stock rose 35% in 5 trading days!

Filled Order:

BOT +5 UAUA 100 FEB 10 16 CALL @.05 debit

Position: The June short play is open

Profit Calc:

Sold (5) 15 CALLs for 0.50 credit

Rolled (5) 15’s CALLs to (10) 16’s CALLs for even money.

Shorted 500 shares @ 15.50

Sold (5) 16 PUTs for $1

Closed short PUTs & stock for 0.40 credit. (500) shares * .40 cents is  $200 profit

Closed (5) 16 Calls for 0.15 debit – $50 profit

Closed (5) 16 Calls for 0.05 debit – $100 profit

Total Profit = $350 in (7) days

Risk/Reward:

$8000/$350 = 4.5% profit in (7) days.

That’s not too bad, considering we had too move the 15 callers.

Margin Note:

Our starting margin was $1500 for collecting $250 credit….it sky rocketed up too approx $8000 after we sold 500 shares short & moved the calls up ONE strike.  Once again, this is why it’s extremely important to manage the margin safely within your account. Had we ran out of available margin, then we would have been forced to take a margin call and close down the trade for a HUGE loss.

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