Not rooting for it to lose value but since it doesn't trade with metals we know it will go down if there is a big drop in the regular stock market...and metals will go up at the same time (usually).
What you have here is an interesting situation. TC does not trade in step with metals right now, so we have the opportunity during a crisis of seeing much higher metal prices while watching TC fall with the regular stock market. There may be an opportunity to buy TC at $2.60 with metals 10% higher than they are now. It is almost like having a winning lottery ticket where you already know the results before the drawing.
Expect moly gold and copper to all go higher today. I hope this doesn't develop into a widespread crisis but if it does, we could see $1500 gold, $4 copper, $20 moly very soon.
Bah, E-trade called me and said I need to resolve the 500 share short position so I bought 500 shares at $67.50.
This cost me a total of $40 ($20 for the assignment of the $70 calls and $20 to exercise my right to buy at $67.50 to cover).
If I could have closed the spread earlier I would have only paid $19 total. On the flipside, I could not get a decent price to close on these deep in the money options so I guess this worked out. Made $900 profit here but that $40 really has me ticked off.
Hah hah. Early assignment of the short leg of a August deep in the money call spread (67.50, 70)
First time I have had an early assignment but the long leg at 67.50 will auto exercise tonight and deliver me shares to cover the 500 short shares. I would have closed out early but there was no volume at all in these deep money options. My fault for thinking Gilead would only go to $80 or so by August, but I still made 150% on this trade.
This is why I closed out that Jan 75/77.50 spread at $2.20 instead of waiting for $2.50 even though I left $0.30 on the table (about $3,000). I trade in a cash account (IRA) and having an early exercise of the short leg could get me in trouble, even though I am technically covered by the long leg.
Filled at $2.20. So I made $1.20/$1 = 120% profit in about a three month period. Not the worst trade in the world. I have high confidence this would stay above $77 (probably above $90) but this frees up $20,000 in cash for future investments (maybe even more Gilead stock). Good luck everyone!
I am also going to look at the puts for Jan expiration. At some point if Gilead goes high enough, a $77.50 or $80 put could be cheap enough that I can lock in my gains from my bull call spread by buying a put. (ie, if I can't sell my spread for $2.25 but I can buy a put for $0.20 that is above the higher leg, I have essentially locked in $2.30).
I hear what you are saying and will defend this purchase with the fact that I bought it when Gilead was trading at $70 earlier this year. Had I known Gilead would go to $94 so quickly I would just have purchased the $75 leg and not gone short the $77.50.
$1.90 fill on a $1 investment in a four month period isn't the worst thing.
Getting another $0.60 for fairly low risk (Gilead going back under $80 somewhat unlikely) would also be reasonable.
I do understand time value and intrinsic value. I normally do trade Apple options but have not done so since the split.
I have a bunch of Jan $75/$77.50 call spreads and can't sell them for a decent profit yet because of the bid ask (paid $1 but can't even sell for $2.25).
I can just hold them until expiration and get $2.50 but that means waiting 4 months and waiting through another two earnings.
Be greedy and wait for $2.50 or sell now for less than $2.25? I am leaning toward greed.
"named himself after jar of peanut butter"
Still cracks me up now when I see you post skip.
Sorry, but 20,000 shares on a 3 mil share day couldn't really have kept the price down much. I just decided the $2 jan calls had so little time premium to the stock (trading at $0.95 when you could sell stock at $2.91) that it was advantageous to switch out to some options.
Because for every $1 of moly increase, TC makes an extra $28m a year profit and moly has been moving by several dollars.
Copper has been largely staying in the $3 to $3.20 range which is only a few million extra profit (at $0.20 and current production levels, about $15m extra profit.
Glad you didn't have to sell them because of margin call, but I think even in the $2.70s you were safe from that. I unloaded 20,000 in the 2.90s when the stock didn't do what I thought it should have done after earnings but I rebought 180 Jan $3 calls and sold 60 Sept $3 calls against those. Essentially I am about at the same level as before but with more free cash.
Good luck to you and hope your financial concerns work themselves out for the positive.
Shhh, I sold Muffin Sept $3 calls and he is mad because they are going to expire worthless. He is paying for my child's education. Wait a sec, I don't have kids. Well, he is paying for my snowmobile or quad.
"one of these guy name himself after jar of peanut butter"
I am curious about those 60 Sept $3 calls I sold. Be nice to get called away on them but if not I pocket $900 off of it. Win win.