As of this afternoon I checked my account and i have some more book keeping to do. I find that I have twelve shares of SBUX in my retirement account (tax deferred) and 288 in my taxable brokerage account, in addition to short 3 x $47 strike Jan 2014 puts. Today's delta on such a position would be about 433.
My desired portfolio positions due to guidance in three various services are: 44%*400 shares for 176 shares (portpro) 50%*48 shares for 24 shares (portpho) and 5%*185 shares for 9 shares (portody), 7 shares (portsa) and 6 shares (portiv), in addition to 44%*4 short $47 strike Jan 2014 puts(portpro), or close to two contracts here. As the puts have a -.4434 delta, dialing in the delta of the desired position at 176+24+9+7+6+.4434*.44*4 = 300 delta points on shares.
So i have to reduce to two short puts at 88 delta for both. And then i want to be 212 shares long.
This will cause me to buy back one $47 strike Jan 2014 put and liquidate 88 shares in my taxable account. I will set these three transactions to take place conditional on the time being 9:45 or later tomorrow 8/28/2012.
The cost of the 88 shares which will be sold are determined on a FIFO basis and are part of a 214 share lot purchased 8/22/2012 15.14 for $10326.57 or 48.26 per share including commissions. Current quote is $49.14, indicating the potential for potential gain of 88*($49.14-$48.26) = $77.44 total gain.
The proceeds from selling the put are $299.67. Last trade was 2.71. Indicated gain with commissions of one dollar are 27.67.
77.44 + 27.67 = 105.11 gain is probable. I believe the order resulted when two orders were submitted simultaneously with the 214 share order entered above, ending in over allocation of 54 shares on that day. The twelve shares in the retirement account were ignored one day on a sweep, leading to the belief i was 44 shares short and piling on 11 shares at two more intervals, leading to 76 shares explained. Sloppy and quick accounting methods increased the risk and gambling provided a return.
Nothing to be proud of. I am entering the orders to close now, using the conditional orders to trigger the sale at 9:45. 4 cent spreads are expected to affect the put trade costing me four dollars. About 1 penny spread on the stock is noise.
Disclosure: I am long SBUX.