MCM July 2011 option expiration disposition.
All the current open positions are out of the money
and should expire worthless with the exception of EBAY.
EBAY closed at $32.19 today, however after hours shows the stock
up to$32.78 up $0.58.
My initial plan is to price an order to close the EBAY July 32 call at
$0.50 based on today's close, however the after hours market action may
make that difficult if the stock should open near the price of $32.78 tomorrowBecause of the uncertainty of the EBAY open we will still place a
$0.50 limit order BUY to CLOSE on the EBAY 32 Short call.
However, in case we can not get filled at the $0.50 price above, we will place a STOP LIMIT price of $0.75 on the EBAY 32 call, at the same time, in case we get the after hour uptick on EBAY.
It will be a contingency order if one fills the other is cancelled.
However, please note that this is a STOP LIMIT, not a STOP, so the EBAY 32 call could open higher than $0.75 and we might not get filled unless the option drops back to $0.75 in price to $
If one of the following events above does not trigger an execution, you will
be sent an email early tomorrow during the opening to let you know how we
are going to close out this position.
So we will either get fill at $0.50 or less on the limit order to BUY TO CLOSE or we will get STOPPED out with our BUY TO CLOSE at $0.75
however, if EBAY gaps up and neither event alternative triggers a fill and we get no execution, meaning not getting our limit price of $0.50 or being stopped out if EBAY 32 call opens up for more than $0.75, At that point you will receive an email as to how to exit the trade and at what price tomorrow morning, right after the opening.
In case you will not be able to be near a computer tomorrow before the close and these orders can not be executed or you can not act on the email tomorrow morning if it needs to be sent, you can place an order to close the EBAY short 32 call with MARKET ON CLOSE (Buy to close )and take what ever the closing price is of the EBAY 32 call
This is only to be done if neither of the first two order conditions are not filled and you are not available for the email.
In regards to the other positions, always remember, if any issue looks to close in the money, even by as little as $0.01, you will have stock called away that you may not have.
To avoid this please be prepared, in case Murphy's law should appear for a untimely visit, to close out those positions if that should happen.
Unless there is abnormal activity tomorrow the only position we need to deal with will be the EBAY short 32 call as explained above.
This is the last MCM July 2011 watch list, as the August watch list starts
Additional August recommendations this Weekend.