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Linn Energy, LLC (LINE) Message Board

  • ronharv ronharv Jan 28, 2013 2:41 PM Flag

    Options

    After selling the Feb 35 calls a week or so ago, LINE went down some then gathered up its skirts and began to prance strongly ahead, leading me to conclude that the units would likely continue sashaying north into the distribution. So, irredeemable speculator that I am, I bought 88 of the Feb 36s for 2.15. The premium was a puny .06.

    Next I jotted down the price movements of LINE both for one day and two days prior to ex-div., covering about a dozen of the latest quarters. I initially thought that the day before ex-div would be the more promising option sales date of the two. Not the case. So I plan to sell on Friday rather than Monday. The only problem is that the option bid is regularly under intrinsic value. So I'm thinking of exercising the options on Thursday and selling units on Friday rather than the options. Factoring in commissions, it could be worth another $500 or so. BUT will the liquidity be there for 8800 units? And then, of course, whether options or units, there's the matter of timing, which is not my strong suit. Stay tuned.

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    • Because the sale price on my Feb calls were consistently below intrinsic value, I exercised my options for LINE units just after the market opened this morning. This was a first for me, so I didn't know how long the lapse would be between my order and the units showing in my account. It was only about 60 seconds. Plus some monster margin. Although the plan was to sell on Friday, having expensive units vs. cheapie options in the account was an unanticipated mind-changer. So I sold in several separate lots and made a nice 8.4 K. Remaining are my sale of 65 April puts at 32. I wouldn't mind closing out at a nickel.

      • 1 Reply to ronharv
      • Well, I did close out my sale of 65 April 32 puts by buying back a $.05. A nice trade, as I initially received $.715 (on avg.) for the sale. Should LINE drop a few points over the coming weeks, I'll keep my eye on the July 33s or 32s. And if the units can rise a bit from here either today or Monday, I wouldn't mind selling the July 43 covered calls if I could do so for $.50.

    • Time to buy puts...37Mar are a good start...

      Sentiment: Strong Buy

 
LINE
12.24+0.26(+2.17%)Dec 19 4:00 PMEST

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