Sold to open CF 7/15 expiration $28 strike calls


Sold short 6 contracts of CF 7/15 expiration $28 strike calls at $0.48. Total proceeds after commission are $275.55 or $0.46/share.


CF Industries Holdings (CF) is up almost 5% on the day, as of right now. I am selling these in-the-money calls against my long stock, even though the stock has not performed as well as hoped (I am up less than 2% on the position opened on 5/31).

Given that there’s just one day left to expiration, I am explicitly betting that the stock will decline tomorrow (or during the remaining 150 minutes of trading today). If not, I will be out of the stock for a paltry 34¢ gain. If so, I don’t care. A week ago the stock was sitting down at $23.50, now it’s above $28. The stock has rammed through its declining 20-day and 50-day moving averages without stopping. I think it will need to pause tomorrow.

If the stock trades between $28 and the current price (ca. $28.20) tomorrow, I might buy back the calls. Or not. Fertilizing season is over, now, and I am not sure where the next catalyst will come from. Even though the stock is vastly undervalued, the floor underneath still seems quite soft.

July 14, 2016 at 9:22am · CF · sell to open · options

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