Cabot Profit Booster Trade Alert — Scorpio Tanker (STNG)
Sell Existing Position: Sell your Scorpio Tanker (STNG) Stock and Buy to Close your February 40 Call.
While almost all of our Covered Call trades are working well, Scorpio Tanker (STNG) stock fell through our stop yesterday afternoon. And because Cabot Profit Booster is a very disciplined system and we are tied to a pre-determined stop we will exit our stock and option position today for a small loss.
To execute this trade, you need to:
Sell your Scorpio Tanker (STNG) Stock Position, and
Buy to Close your February 40 Call
For example, you could Sell STNG stock at 33.25, and Buy to Close the February 40 Call for $0.55 (please note the stock and options will be moving throughout the day, so these prices are simply an approximation of prices you should be able to achieve).
While this trade did not work, big picture, it did highlight the risk reducing component of covered calls as the call that we sold for $2.25 will be closed for approximately $0.55, which helped offset the losses from the stock decline.
Once today’s trade is completed, we will not own a STNG stock or option position.