Sold CMI Naked Puts and Added Naked Calls to AA Position
Alcoa (AA) has been slipping since I added to my position on Monday. AA is still trading above my strike and the chart doesn’t show a break in support yet, but I decided to start hedging my position a little since I have 500 shares at risk (300 at the June 35 strike and 200 at the July 40 strike). If I was more bullish on the markets overall I’d probably not be as nervous about the downside risk and also wouldn’t be as optimistic about the safety of the upside risk to my new naked calls.
While AA was trading at 41.33 I sold three AA July 47.50 naked calls (AAGW) and received $341.75 after commissions. AA has already had a big run up and clearly it could keep going, but I think it’ll hit a bump in the road before July expiry and won’t cross $47.50. At the same […]
Original post by Alex Fotopoulos