1. We bought back our Feb. $37 short calls @ $3.60 = ($3,600)
2. We sold our Jan. 2007 $32 calls @ $9.80 = $9,800
3. We sold our Jan. 2007 $42 puts @ $2.90 = $2,900
Net credit of $9,100.
We originally paid $14.60 ($14,600) to initiate the strangle position.
Net debit of $5,500
To this point we have taken in $5,950 of premium.
Net credit (profit) of $450.
I know we've been in this long term position for a long time. However, the market moved up and violated our range. We have been patient in waiting for the market to come back down to our range, but at this time, it seems like we can make better use of our money with a different strategy.
Our profit, though small, represents almost 10% on what we had at risk. Could have been worse.
Take care and trade smart!!