Sold calls on CAT

J

Jaxon

Or should I say, "I sold catcalls" ?

I want to start selling some calls on stock I own. Thought I would start with CAT. I know earnings come out Friday, but these calls look pumped up 40-50% implied vol. So, as an experiment.... I sold 2 calls @.77 :D
If stock soars I still own a few shares.
 
40 - 50% implied, or even 100 - 200% implied, is pretty typical for options that expire in 3 days and have an earnings announcement in those 3 days.

YHOO I believe had implieds of around 80% before the earnings.
 
whoops! CAT is up 4 points this morning! Welcome to the world of options! :eek:



(I sold the 70 calls on Thursday)
 
Quote from Jaxon:

whoops! CAT is up 4 points this morning! Welcome to the world of options! :eek:



(I sold the 70 calls on Thursday)
More...

Looks like this won't be the best possible start in options for you, but look at the bright side, you'll actually learn something from this experience.
 
With CAT at 72 I have effectively sold 200 at 70.77 so I have reduced my profit today by $246. No way to call that a good trade, but I still am overweighted in CAT (because it has performed so well past few years) and will probably sell some more today.
 
Quote from Jaxon:

With CAT at 72 I have effectively sold 200 at 70.77 so I have reduced my profit today by $246. No way to call that a good trade, but I still am overweighted in CAT (because it has performed so well past few years) and will probably sell some more today.
More...
You can cry all the way to the bank.

Don
 
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