I closed out the option portion of my covered call on USO, buying back the 41 May call options at .30 (sold them at 1.33). It’s tempting to sell 39 calls now, they are at around .8 right now, but I’m pretty bullish on USO bouncing back.
I did covered calls on USO, selling-to-open the 41 May calls at 1.33 and buying USO at 41.47 for a net investment of 40.17. The US economic situation continues to look up, and the oil spill in the Gulf will do nothing to help the supply situation. Plus it gives companies an excuse to raise oil prices…
Unlike the S&P 500 or Dow Jones Index, there is no way to directly invest in the VIX index. I’m sure some really smart people have tried to figure out how to go long or short on this computed volatility index, but there’s just no way to do it directly. Instead, you have to invest in a security that attempts to track VIX. None of …
One alternative to a covered call is a bull spread. You give up some premium in exchange for significantly reducing your downside risk. I bought SPY 118 May calls at 3.91 and sold 121 May calls at 1.82 for a net debit of 2.09. SPY was right at 121 at the time, so the the 121 calls were right at the money–which is the maximum …
The settlement value for the VIX index options for April was 15.94 This settlement value is quoted under the symbol VRO (^VRO for Yahoo, $VRO for Schwab). Today’s 21-April opening value for the VIX index was 15.80, so the difference was a relatively small 0.14 (.9%). The settlement value and the real time VIX index quotes are computed different ways, so there is usually a …
