DRYS - Close Position

Written on January 31, 2009 – 3:21 pm | by admin

Thanks to some adivce from covered callers, I dumped my DRYS position after its 20% fall on Thursday.  I bought my $10 strike back for $1 and sold my shares at $8.865.

Bought 300 DRYS @ $11.95 ($7 commission)
Sold Feb $10s @$2.60 ($10.75 commission)
Bought Feb $10s @$1.00 ($10.75 commission)
Sold 300 DRYS @ $8.865 ($7 commission)

All in all, this resulted in a 15.49% loss or $481.  I’m glad I dumped the position because it fell another 20% or so on Friday and is starting the weekend in the $6.60 area.

I think the biggest point to learn from this transaction is that you can get out of a covered call position even if your calls are already sold.  I have heard some stories from people where they kept their position as the stock fell because the “couldn’t” get out while being short call options against their shares.  If I had held on to my shares, I would be down another ~$400 and crying myself to sleep.  Just beacuse you have sold calls against some shares, don’t feel that you can’t get out of the position should something cause you to not sleep at night.


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