Monday, June 1, 2009

First trade entry

Alright! First trade entered!

I made the trade on May 27. I have purchased 100 shares of stock and sold an out of the money (but closest to the money) July call (fifty cents away.) The premium received from the call (after transaction costs) equaled 5% of the stock. The chart of the stock is in a recovery mode since the spring thrashing.

I made this purchase for several reasons. The chart of the stock is showing major support at this level. The company came out with a positive surprise last quarter and guidance for next quarter was positive. The stock has room to move up without being called away right away. The difference between the call price and the stock price also allows a decent profit after transaction costs if reached. The call premium received allows continued growth in capital for the account.

As always, I do not fully divulge information on trades until they are done. At that point, I will give out the rest of the details (stock name, price purchased, call purchased, chart info) that sort of thing. Please feel free to ask me questions and I will answer them the best I can without endangering the trade.

1 comment:

Anonymous said...

uh. funny text :)