Wouldn't you know it, I tried to get cute and sell some calls (July 11) against my in the money calls and bamm soon as it gets executed the price takes off. Now I'm proud of myself for reacting fast, to counter the move, I sold July 11 puts (equal amount). Also added some Jan 7 2014 and Jan 10 2014 to make sure I didn't lose any shares. It worked out pretty good.
Just a thought for some of you that are afraid of options ...JAN. 10 2014 trade at around $5 , About 18 months of time and paying about $3.7 in premium. You can just leave it alone and wait for a big run up or you can sell calls against it and I think I can collect enough premium within 6-8 months to make this a FREE trade if managed properly. Selling a call for August strike 12 or 13 you collect $1.20 or $.90...pick your poison.
Let's pick strike 13 for August and it gets called away. You paid $5 and if it gets called at 13 that Jan 10 2014 should be worth about $ 6.5-7and got paid .90. You get cashed out at around $7.50 +....$2.50 on a $5 investment. You do this a few times and you got some serious money.
If it doesn't get called and it's trading below 13 in August you repeat the process and you lower the cost by $.90 ...do that about four times and you have paid for the premium. The risk is the stock goes down and even in that case it softens the blow.
I can't contribute with the due diligence, you guys do just fine at that but I thought some trading ideas riding Arena up would get some to think outside the box. I hope it opens up some interest and help some of you make a lots of $$$$.
This was a nice day......