OPEX: September 2009 Options Expiration

Yet another profitable options expiration.

There were times where I used to dread options expiration as I had absolutely no idea what it meant. Those were the times I was told, the market does crazy things during options expriation days which is the third friday of every month.

So stay away from the market and dont even open your portfolio on these days… HUH?

Now, the times have changed! Now, I love option expiration fridays as those are my paydays. I have become a net option seller and love to see my options expiring worthless so I can turn around and sell more for my next payday.

While I am still fine tuning this appraoch, as you can see from the last opex post for August Options Expiration I have been on a roll.

Lets get to the nitty gritty of this month’s opex numbers.

This month, I will be called out on three big positions. Alcoa, US Oil Fund and MEMC Electronics

Alcoa pays dividend

On Aug 25th Alcoa paid $3 dividend.

Trade alert: Selling Sept 13 $AA Covered call

I am selling the Covered call

Call Alcoa inc $13 exp 09/19/09 for a net credit of 82 dollars.This is already in the money and I might have sold it too soon.

Well, will wait and see how $AA works out. Market overall is overbrought and is on a ‘sugar high’ as CNBC puts it.

If the tape rolls over then this call sale will give me a nice cushion on the downside.

Disclosure:Long $AA in account and short one covered call at the time of writing this post

Trade alert: Buying $AA

Long $AA 100 at 12.64

BOT 100 AA ALCOA INC Limit $12.64 Day
8/04/09 12:08 PM ET Executed $12.64

Playing the Inverted HS pattern on a breakout