Bought to close RIG 7/8 expiration $12 strike calls


Bought 10 contracts of RIG 7/8 12 strike calls at $0.17. This closes the short position originally entered on 7/1 at $0.82. Total return less commission was $634.55. Return per share after commission was $0.63.


My short-term thesis on Transocean (RIG has played out pretty much as expected.

I debated whether to leave the short call on and risking that the stock will run up without me, tomorrow, or taking it off, which meant giving up on the remaining premium. In the end, I chose the latter.

Tomorrow’s stock market will be dominated by the jobs report in the morning. If it is negative, then RIG will almost certainly drop substantially, which would leave the just closed calls worthless. On the other hand, if the jobs report is strong, then I think the market might rally very sharply: We had hardly any appreciation in 18 months, the Fed is not going to act in the next few months, and today’s weekly petroleum report had some very encouraging aspects in it (domestic production declined 12.2% yoy, more than in previous reports). Despite this, crude oil got hit very hard today (-5.6%), which might be due mainly to rumors about a struggling fund:

Briefing news item on crude oil 7/7/2016Briefing news item on crude oil 7/7/2016

July 7, 2016 at 2:07pm · RIG · buy to close · options

Previous:Bought to close ENDP 7/8 expiration $17.50 strike calls
Next:Bought to open ECR