Today marked the first day of a new month for a short-duration options refresh. First things first.
My GDX went north of the strike price for the covered calls I wrote. I bought most of them back and will realize a long-term capital gain on the portion I did not repurchase. Cash proceeds will stay in cash. Yes, I'm waiting for the next leg down. It's just around the corner, sooner or later.
Now for the options updates.
I renewed covered calls and cash-covered short puts on GDX.
I renewed covered calls on FXI. No short puts this time, as China is overheating thanks to real estate flipping and insane leverage. I won't go long any more China / FXI for a while but I'll hang onto what I have and keep writing call options.
One new options position I opened was to write cash-covered puts under TDW at a strike price of 40. I still think Tidewater's intrinsic value is a lot higher than that so I wouldn't mind being forced to increase my stake. The covered calls I wrote on TDW last month will expire in Oct. 2010.
Now let's talk fixed income. I put a little bit of cash to work by going long Treasuries that mature in October. I also decided to give the State of California some confidence by going long California state munis maturing in Sept. 2011. I did this after months of considering the likelihood of repayment for state GO bonds, and I find that to be quite high. I believe the state government will starve every other program - including education - before it considers nonpayment of muni bond interest.
I keep looking at FLIR but I'm not ready to pull that trigger just yet.
That's it for this month.
My GDX went north of the strike price for the covered calls I wrote. I bought most of them back and will realize a long-term capital gain on the portion I did not repurchase. Cash proceeds will stay in cash. Yes, I'm waiting for the next leg down. It's just around the corner, sooner or later.
Now for the options updates.
I renewed covered calls and cash-covered short puts on GDX.
I renewed covered calls on FXI. No short puts this time, as China is overheating thanks to real estate flipping and insane leverage. I won't go long any more China / FXI for a while but I'll hang onto what I have and keep writing call options.
One new options position I opened was to write cash-covered puts under TDW at a strike price of 40. I still think Tidewater's intrinsic value is a lot higher than that so I wouldn't mind being forced to increase my stake. The covered calls I wrote on TDW last month will expire in Oct. 2010.
Now let's talk fixed income. I put a little bit of cash to work by going long Treasuries that mature in October. I also decided to give the State of California some confidence by going long California state munis maturing in Sept. 2011. I did this after months of considering the likelihood of repayment for state GO bonds, and I find that to be quite high. I believe the state government will starve every other program - including education - before it considers nonpayment of muni bond interest.
I keep looking at FLIR but I'm not ready to pull that trigger just yet.
That's it for this month.
