Option Investor

SOLF MAY 17.5 closed out for $0.75

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SHORT SOLF MAY 17.5 closed out for DEBIT of $0.75

Some subcribers who recieved the blog late this morning might have gotten out for as little as $0.45 or those who didn't put in a limit as high as $0.90.

Anyway, you should be out. What is happening is a classic "short squeeze" in SOLF
and Hindsight is 20/20 and of course we could have closed it out early last week for $0.05....and avoided Murphy's Law, but that was then, this is now.

However, you should be still long your May 20 SOLF calls for tomorrow's opening
If this stock gaps up, and holds after the option rotation is complete, you might be able to dumb your May 20 call for something, even if only $0.05 as $50 covers the $15-$30 commission you will pay at varying broker-dealers. So you net a few extra dollars to help go against the loss and maybe you get a $0.10 or more, who knows tomorrow and another $1.00 plus more early, the short 20's may be running to cover.

Any way, we should be out of the short $17.50's for May


BK -
is now in the money by $0.70. If BK looks like it is going to close above $45 tomorrow, you must cover the May 45 short call or you will be exercised for delivery of 1000 shares of BK at $45. So be sure to close out the short call market on close, if we look like we are going to close over $45. If we get a pullback tomorrow and cloe under $45 ( $0.70 downtick is needed ) you need do nothing

JCG - Same situation if the stock looks to be closing over $47.50 , which more than likely it will, then you must close out the $47.50 call before the close, just like BK.

However, if the stock continues to climb and looks like it will cloe over $50 ( and there is that chance ) . You should exercise your 50 call and take the stock and then delivery the stock ( to the individual who exercises the short 47.5 against you. That way you know your loss will only be $2.50 or $2,500...If you try to close out your 50 by selling it you might not net out $2.50 on both sides.,because of the BID/ASK SPREAD. But this is only an iue if the stock closes above $50....if less then $50 but more then $47.50,you need to buy back the $47.50 and close out the position.

Some issues to watch out of the corner of your eye

IWM and SPY are potentially two positions to watch in case we get a 200 - 300 DJIA move or Big Russell Index move.. Otherwise they should expire. But be sure to close out any short call or put that is going to close in the money before tomorrow;s close, or you will have to deliver stock, that you do not own.

LVS - Eventhough the call side is still $3.99 out of the money, after a $4.01 move today, some simple math will tell you, we don't need a repeat of the move we had today tomorrow. Anyway, we are basically 4 points away from the MAY 80 short call. But be sure to watch LVS so there is no surprise at the close

Remember: Also check to see if any position is going to close in the money and be sure to close those out before the close of the market tomorrow.

NOK, LVS (put side), SHPGY should be okay tomorrow

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