12/20/2010
RIG@$74.81
We’re adding a 1/4 position in RIG again on a slight 5 to 4 ratio.
We’re Buying 5 Jan. 2012 60 Calls for $15.90 and Selling 4 Jan. 2011 72.5C alls against them for $1.28.
RIG corrected mildly and supported again on its trendline. We would have liked to have seen a little more of a correction but with POMO after POMO after POMO being done by the FED nearly every day and twice on some days, even mild corrections are being prevented from happening. As we’ve noted, we have strong oil thesis and like RIG among many other oil-related stocks. We’ll stick with this 1/4 position for the moment with an eye towards adding more.
1/7/2011
RIG@ $74.81
We’re adding another 1/4 position in RIG. Again we’re buying 5 *RIG Jan. 2012 60 Calls for $19.30 but selling 4* Feb 80 Calls at $1.45.
This leaves us with a 1/2 position, 5 to 4 ratio in RIG but with 2 different short call series.
1/21/2011
RIG@ 78.25
Since it is expiration, we needed to make a decision on the RIG short calls in January.
There are several options that we can do with this, close completely, roll out or roll up.
If you believe in the oil story, then you may want to roll out and up.
This would entail buying the short call in January back and selling something in Feb like the Feb 80s or higher.
If you think the stock may have trouble but still believe then you could sell the Feb 75s.
If you want to reduce your risk, you can take off half of this trade to lock in profit and add to the position if it pulls back further.
We are choosing to reduce risk and look for more of a pullback since we have added DO and BP to the portfolio.
We are buying the Jan 2011 calls back for $5.80 and selling the Jan 2012 60 calls at $21.25 (the $15.90 call).
This gives us a short term profit of $867 on this original 5 vs 4 lot.
2/9/2011
RIG@$77.31
RIG, with oil coming off and RIG going below support we are getting protective by closing and looking to re-establish in near future.
Sell to Close the RIG Jan 2012 60 Calls for $20.10
Buy to Close the Feb 80 Calls for $o.7o
We had a position from December but closed that on January 21st. So we have been riding this 5-4 since Jan 7th.
