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Monday, May 30, 2011

May Zagg trade results/observations

The May Zagg trade started on March 30 with the stock trading at $7.73. Sell The Call sold the May $9.00 call for $0.30 before commissions. The trade ended right at the strike price of $9.00. This is the first time that a trade has ended right at the strike price. This enabled Sell The Call to continue selling calls against the Zagg stock that Sell The Call owns.

There was an earnings release during this time in which Zagg beat quarterly estimates by $0.03 per share. This pushed the stock up past $10.00 per share before it settled in around $9.00.

Between the time that the March Zagg trade ended (March 18) and this one started (March 30), there wasn't a call available to sell and keep the trade profitable. The fact that Sell The Call had to wait before selling another call showed some vulnerability to the strategy that needs to be fixed. It means that the stop loss formula needs to be adjusted so that it is placed at a price point in which Sell The Call will still be able to sell another profitable call when the current one expires.

Below is a list of the weekly updates for this trade:

One Week left 
Two Weeks left
Three Weeks left
Four Weeks left
Five Weeks left
Six Weeks left
Seven Weeks left
New Trade Started 

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