RIMM Position Outcome   Leave a comment


The May options expired on May 22nd. As a call writer, I get to keep the premiums I received initially. Since the stock closed below the strike of $70, I also get to keep the shares. By writing calls against the stock, I was able to reduce the cost of each share to $68.14. Unfortunately, the stock is at $59.23.

When a short call expires, no additional transaction fees are taken from the options premiums received or applied to the cost of the stock held long. If the stock had been called away (“assigned”), I would have incurred an additional transaction fee for the sale of the shares.

Here’s a quick spreadsheet to show the position calcuations:

The reduction in the cost of the positions from the premiums received for writing the calls offset about 23% of the loss, but the position is still in the red pretty badly.

Here is a 3-month chart as of the close today:

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: