Well Puts

November 2009 Options Expiration summary.

I made a few trade adjustments earlier this month and rolled CENX and GMXR forward and down:

• Century Aluminum Co. (CENX)
• GMX Resources Inc. (GMXR)

I also closed out of some short options positions early to lock in a profit and eliminate any risk of assignment.

• Ultra Financials (UYG)
• McMoRan Exploration Co. (MMR)

DryShips, Inc. (DRYS) – The DRYS November 6.00 puts I wrote at the end of September expired OTM. This is a 7 week return of 7.38%. *

DRYS is forming a wedge on the hourly chart – like just about every other chart I’m seeing right now. I might take another opportunity to sell more puts this coming week. Probably the January 5 strike. I should probably write some covered calls on the small position I’m holding too. I was hoping for a breakout much like DSX but it hasn’t formulated yet.

DRYS Hourly

My current cash position is at about 60%.

* The return is calculated using the premium I received from the sale of the options (less commissions) and the capital required to pay for their possible assignment.

I rolled the GMXR November 15 puts forward to December and down to 12.50 strike. I wasn’t able to do this for a credit though. I’m fine with that as I didn’t want to take assignment at this point.

The 50-day SMA is still rising, but until Natural Gas can put in a bottom I don’t want to have any more exposure to this area.

GMXR Hourly

I sold to open GMXR (GMX Resources Inc.) November 15.00 puts. A breakout from a flag pattern on higher volume this morning prompted the trade. The 15 strike gives me a little cushion and the premium I received will give me a great yield if this expires OTM.

GMX Resources is an independent oil and natural gas exploration and production company. This provides me an additional angle to invest in natural gas other than just UNG.

GMXR Hourly