A position was established in General Electric on March 2, 2009. The rational behind this position is that the company has simply been battered down due to the viability of the financial group. The underlying industrial conglomerate is the key part of this company, and can be especially competitive in the "green" economy being pushed by the new administration. For this particular position, the decision was made to at first establish a 2 month covered call position, due to the relative uncertainty regarding possible ratings cuts.
3/2/2009 -- Bought 100 GE @ 7.83
3/2/2009 -- Sold To Open 1 GE April $8 Call @ 1.09
3/12/2009 -- Bought To Close 1 GE April $8 Call @ 2.18
3/12/2009 -- Sold To Open 1 GE March $9 Call @ 0.85
The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $783.00
Downside Coverage: None After New Call Sold
Possible Max Upside: 11.87% (This is the upside after factoring in initial cost, sale price of original option, cost to buy back option, and sale price of more recent option)
Thursday, March 12, 2009
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