One position in Direxion Financial Bull 3x was closed on April 3, 2009. This was done as a result of the time value essentially disappearing leaving the stock-call value at almost the strike price. As such a limit covered call order (which buys the option and sells the stock at the same time) was set for 3.95, which was 5 cents below the strike price. This trade was executed, and the resulting performance is noted below.
3/20/2009 -- Bought 100 FAS @ 5.125
3/20/2009 -- Sold To Open 1 FAS April $4 Call @ 1.68
3/24/2009 -- Dividend on 100 FAS @ .01562
4/3/2009 -- Bought to Close 1 FAS April $4 Call @ 3
4/3/2009 -- Sold 100 FAS @ 6.90
The important purchase metrics are below for insight into possible profit and loss (these all include commissions):
Stock Purchase Cost: $512.50
Original Downside Coverage: 32.7%
Resulting Upside (including dividend): 13.66%
Annualized Upside: 356.16% (Annualized Upside Is Calculated Using The Number Of Days The Position Is Held)
Friday, April 3, 2009
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