Tuesday, July 17, 2012
Expiration Forecast: MAS and NOC
As the options expiration date approaches this Friday, it appears that I will have a couple of the positions called away for the first time in a few months. The positions are as follows:
· MAS (200 shares) – 2 July contracts at $12
· NOC (200 shares) – 2 July contracts at $60
Neither position has been particularly long term for me. I bought NOC in February, when I was traveling extensively, and have held it for about 150 days, starting with a May contract and rolling out to June and then July. The MAS position is one I have only held for 20 days.
I use the Delta statistic as a probability indicator sometimes. In this case, the MAS position – trading in the money at $13.78 at yesterday’s close, showed a Delta of .85, and the NOC – trading ITM at $63.49, showed a Delta of .92. While neither has a 1.00 Delta, with only four trading days left it does seem likely that these will be called away from me.
Here’s the history:
NOC – 200 Shares, basis $59.93, 60 Jul 2012 to be assigned
Option Premiums (total): $589.71
Dividends Collected: $210.00
Stock Loss: -$3.36
Absolute return 6.64%
Annualized return (150 days) 20.21%
MAS – 200 Shares, basis $12.24, $12 July 2012 to be assigned
Option Premiums: $130.49
Dividends Collected: $15.00
Stock Gain: -$65.00
Absolute return 3.29%
Annualized return (20 days) 60.03%
I’d like to get back on the pattern where I am seeing some of the positions called away every month. I’ll report back next Monday if these are actually called.