A second investment in the 295K deep-in-the-money call-spread portfolio
Bought 100 contracts of the GG Jan 18-strike calls and sold against them 100 of the Jan 23 strikes with the stock at $27.20. net cost per unit of $405 or $40,620 after commissions. If the stock is $23 or more in eight months, the nominal return will be 23.1% which is at the rate of 33.9% annualized.
05/16/2013 13:02:29 Bought 100 GG Jan 18 2014 18.0 Call @ 9.52 -95,263.71
05/16/2013 13:02:29 Sold 100 GG Jan 18 2014 23.0 Call @ 5.47 54,642.06
If it isn't above $23 by then, I'll just roll down to something like the 20's expiring in Jan. 2015. I can certainly lose short-term but to lose over the longer haul, the stock almost has to be a bottomless pit. It has been a long time since GG traded below $20 a share.