Sunday, January 22, 2017

Option Expiration Day

January 20 was option expiration day.  I previously sold cover calls in Potash Corporation of Saskatchewan (POT) and IAMGOLD (IMG)  in the Canadian markets. Actually, I sold covered calls on these positions more than once.

I previously wrote about selling the covered call in POT with an expiration date of January 20, which you can read about here. This covered call was assigned at expiration as POT was trading above the strike price of $25.00 at expiration. POT will be have an earnings release in the very near future.

IMG was trading above my strike price of $5.00 at expiration, so this covered call option got assigned as well. The wrote several covered calls on this position.The premium I received on this particular covered call at the time of writing the call was $413.05 after commissions. I sold 9 contracts as I owned 900 shares. IMG does not pay a dividend currently.

I believe POT will see some downward pressure in the next while.  POT is currently in the process of merging with Agrium as the shareholders of both companies voted in favor of the merger.

POT and IMG were purchased on the Toronto Stock Exchange prior to writing option contracts on these positions.

I will update my investment tab spreadsheet in earlier February.

Do you use covered calls for positions you are trying to sell? Do you sell covered calls when you are bearish on a position to collect some income?
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

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