Sold HEK puts. These puts have a strike price of $4/share and an expiration of June 2013. The premium paid was $0.60. I already own HEK stock, but would like to own more. If these puts are exercised by the buyer, I will be put HEK stock to fill my target allocation.
The total premium is 15% of the strike price; since I use only secured puts, that means I'm earning 15% on the money I've set aside for this position. The option duration is 4.1 months, so I'm earning 3.66% per month. I wouldn't make this trade if I didn't want to own the stock.
Showing posts with label HEK. Show all posts
Showing posts with label HEK. Show all posts
Tuesday, February 19, 2013
Tuesday, March 22, 2011
Bought HEK calls
Bought HEK Sep 17 $2.50 calls for $3.83. The stock is currently trading for $6.28. If exercised, these calls would make HEK 4% of my portfolio at a net buy price of $6.33. The net buy price is about the same as it would be if I bought it now, but my investing has a more defensive posture right now and this strategy reduces my risk exposure. That is, is HEK drops to zero I will have lost "only" $3.83 per share rather than $6.28.
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