I bought 500 shares of DUG at $43.50 and sold 5 October $43 strikes for $4.30 to rake in about $2150. This represents a 10% return in 30 days till October expiry if I don’t get called and 9% if I do get called.. I’ve watched UYG and with AIG going under (a big component of UYG), I decided it wasn’t worth the risk for me. Russia is in a total panic and has just cut their oil tax to try to raise revenue.
I think oil will drop over the next 30 days and this will impact O&G companies negatively which is why I went short Oil & Gas. I hope to be called on DUG but anything can happen, even a rally in Oil & Gas.
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Hey Slick,
I bought about 300 shares of UYG @ avg price of 16.93. I could be wrong but don’t you think that AIG’s collapse is already factored into today’s UYG prices?.. or is it that you expect more firms to go down.. I am betting on UYG doubling in the next 3-4 years and I think that this is a good price. whats your take?
Thanks!
Am I reading it right that while IYE is trading at around $39, its october $110 calls are at $8.50? That’s more than 20% roi! What am I not understanding here that makes it seem too good to be true?
Eric,
those are ADJUSTED options, be careful with them.
Joe,
UYG may double but banks continue to fail and I’m not sure what this new government bailout will do long term. DUG just seemed like a safe play for me than UYG. It was a tough call but there are plenty of opportunities out there.
Yeah you are right.. I’m going sell all my positions within the next week.. especially if UYG touches 25..
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