Seeking Alpha
  • dak269
    Need options help...sold a Jan $37 call for $1.21 before earnings on CVS..what am I looking at if thinking of closing it?
    11/16/11
    Reply (8)
    • dak269: Meaning why would I or what should I be thinking about?
      11/16/11
    • dak269: Forgot to add it's a covered call....
      11/16/11
    • lmcalist1983: Obviously if you buy the call back right now at 2.78 you'll lose 1.57 on the option but obviously you should be up on the 100 shares.
      11/16/11
    • lmcalist1983: You could buy back the 37 and sell a higher strike (38, 39, 40, etc) if you think it's going to move higher. I'd watch the chart to see
      11/16/11
    • losbronces: You can buy to close @ 2.7-2.8 right now. A larger loss compared to CVS current price vs 37, so that only makes sense if you expect 38.6
      11/16/11
    • lmcalist1983: what happens at 39.50. It's been a good run so it may pull back if it doesn't break through this point.
      11/16/11
    • losbronces: or better for CVS before January. Or keep the premium and get $37 on your CVS if its still there in January.
      11/16/11
    • dak269: Thanks! I had originally sold a $35 strike, bought it back to sell the $37. I'm a little bearish, so I'll probably just sit on it. No rush
      11/16/11