January Expiration of AAXN and PAAS Covered Calls
Today is the expiration of our first positions. Below you will find my instructions on how to manage our AAXN and PAAS trades that are expiring today.
Having bought Axon Enterprises (AAXN) stock at 73, and Sold the January 75 Call for $2.50, the ideal spot for this position was at 75 today. And as of 10:30 eastern time today AAXN stock is trading marginally above 75, which is perfect!
That being said, we won’t know exactly where AAXN will close today, and with earnings coming soon I am going to exit our position for a profit of $200 on the stock position and $200 on the call sold, or a net profit of $400 per covered call, or 5.67% in just over one month’s time.
To execute this trade, you need to:
Sell your AAXN Stock Position, and
Buy to Close your January 75 Call
For example, you could sell the stock at 75, and Buy to Close the January 75 Call for $0.60 (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).
After this trade is complete you will not have an AAXN stock or option position.
** If you sell your stock as advised, you MUST close your call today as well **
Despite some strength shortly after we initiated our Pan American Silver (PAAS) covered call, the stock has started to pull back. While this pullback has been fairly orderly, there is little doubt that the stock has lost its momentum. And because of that I am going to close my position today for a profit of $45 per covered call, or a yield of 2.15% in one month’s time.
To execute this trade, you need to:
Sell your PAAS Stock Position, and
Buy to Close your January 22 Call
For example, you could sell the stock at 21.40, and Buy to Close your January 22 Call for $0.05 (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).
After this trade is complete you will not have a PAAS stock or option position.
** If you sell your stock as advised, you MUST close your call today as well **