Close: HBC -100%

Well, this one didn’t work out.  With the Fed and the Treasury doing all they did in the last week or so all the financials ran higher and never looked back.  I also got assigned on my short calls. but I chose to hang on since the risk profile didn’t change.

In looking back on this trade I should have closed the position when it looked like the Fed et, al. were making things happen that would make the financials rally longer term.  I could have closed for about a 1.50 loss as apposed to a 3.57 loss.   Not closing this position sooner was the difference in this month being in the black instead of down 9%.  Oh well, live and learn.

HBC: Got assigned on my BRCS

For the first time ever today I was assigned on all of my short Mar 22.50 HBC calls.  I was a bit surprised to see the email from TOS about it and immediately checked out my account.  Sure enough I was short a bunch of HBC stock.  I’ve heard that short calls are more likely to get assigned than puts and with the huge pop in the market yesterday I guess someone really wanted that stock.

So now what do I do?  The short answer is – nothing.  The position has the exact same risk profile as the BRCS.  The only difference is my margin takes a bigger hit because I am actually short the stock.  However, I still have the long Mar $25 calls which means until they expire next week my max loss is still the original $3.57.  However, my max gain is much larger now since the stock can become worth  a lot less than the original short option.

So even though my margin is reduced more than I want, there is only about 9 days left to expiry and HBC got knocked down 6% today even with the financials showing more strength.   So if it gets beat down more I stand to make so nice coin off this trade.

Close: ABX BRCS ROI: +26%

Bought the spread in at .10.  It’s down so much I wanted to take the profits and not be greedy.

ROI: 26%