1) Close out my position in BAC opened yesterday for a 12% profit, or
2) Write some covered call, expiring Oct 18 with a strike price $35/share with an option contract at $2.24, to see if I can book a larger profit if a bailout happens, while reducing some of the potential fallout if another bailout isn’t gonna happen.
Selling a $35/share covered call with expiration in 3 weeks, I can pocket $2.25, so if the bailout does propel BAC, I’ll book a $5 profit + the $2.25 option price.
In the event the bailout doesn’t happen, BAC tanks the covered call expires worthless, so I’ll get to keep the the $2.25/share, plus whatever price BAC fetches, which means my cost basis would end put being around $27.85 before i lose money….
Hmmmm decisions, decisions. Thoughts? Yeah it’s gambling. So what….
