Sorry for the late wrap tonight, but it is option expiration tomorrow and between two computer crashes and getting the disposition for tomorrow it ran a little late. Sorry again, but here is the watch list and disposition for tomorrow's open positions.
MCM June 2012 FINAL disposition of action for expiration tomorrow.
We will look at positions from no concern to concern starting with less problems first.
We should have no probelm with any of the followng spread listed below.
The following are all from $7 - $9 out of the money and should have no consequence.
Those issues are STX, GMCR, WDC, X.
Additionally, the next group of spread positions are from $2 - $4.5 out of the money
with relatively low volatility and they too should require no attention.
These issues include MCP, FLR,and LEN.
The third group we should watch, even though these are from $0.50 point to $1.50 out of the money, they do have a chance of sneaking into the money if we have a big up day tomorrow
These issues include MDT, JWN, TM and NEM(put spread),the only put spread we have.
Finally, we have the two issues of concern.
AIG - which for the first time this expiration went into the money by $0.03, closing
at $31.03. We should look to see how the market opens tomorrow and act accordingly.
AIG can be closed out tomorrow for a few cents unless we get a gap open on the stock.
If that should happen, you can wait a while until the stock settles before closing out
the position., However you may choose to wait until near the close of the day an close out
the position IF it looks to close in the money ( above $31 ).
If you are going to be away from your computer, you can close the order near the end
of the day with a MARKET ON CLOSE order.
The is a chance that the issue might close below $31, so those who want to hold it for
the majority of the day could do so, f we get a normal opening, and decide near the
close how to dispose of the position.
Remember: You only have to close out AIG if it looks like it will close
above the price of $31.
Even if it is trading at $31.01 at the close, you will need to close it out, as
you will be assigned stock even if the short side is only $0.01 in the money, believe
me they do it.
IRM - is $0.29 in the money and has been hangn around
anywhere frm $0.10 to $0.35 in the money the last few days.
Of any of the positions, this will be the most likely one that we will have to close.
The premium is fairly low as it is only $0.30 - $0.50 ( last $0.35).
One may want to close out ths position somewhere around the midpoint on this issue, however
there is still a chance that this position could close under $32.50 by tomorrow's close.
For those of you who choose not to close out early on a normal opening. you may
wait until near the close and dispose of t accordingly if it appears to be closing above
$32.50. Remember you only have to deal with the short $32.50 call not the $35 long call.
If you are going to be away from the computer and desire to hold the position, you can
place a MARKET ON CLOSE Order to be sure you will not have the position close in the money
Anyway that is the disposition for tomorrow's positions.
Also as a reminder, if something unusual happens tomorrow on the up side, or to any one of
opur other issues; if any one of them should look to close above the short call strike, be sure
to close them out before the end of the day, although it currently looks unlikely, but if it
should happen, you might have shares of stock called away that you probably do not own and would
have to buy to deliver, with money that you may or may not have.
So, to avoid that problem, be sure that if ANY of the other issues look to close above
the short call strike tomorrow, please close it out before the close of the market tomorrow.
This is the final MCM June report, we will begin following the MCM JULY positions on both portfolio's
tomorrow after the close.
The weekend we may add a few positions, but I may be hesitate against the Greek elections, which may or may
not be discounted by the markets, so there is a chance I will wait to add additional positions.
If we do or do not, you will be emailed on Saturday or most likely, Sunday.