I know that I could probably have waited this one out and watched the contracts go to $0, but I am taking my profit and running.

Bought 10 Citi Apr 4 calls (CD W) for $0.11.   Profit of $247.   Pretty big in percentage terms (66.15%).

UPDATE (11:07am): Currently at $0.05 per contract.  Dropped all the way to $0.02.  Hindsight says that I should have been more patient, but…. “can’t go broke taking profits”.  I truly feel that this will be a dead contract at the end of the day and would have given me 100% profit, but I am OK with the 66% gain in 1 day.

Sold 10 Call options on Citi at $0.39 a contract. Total premium taken in $373.53. This is a covered call since I do own the 1,000 underlying shares of C.

As with my trade 2 days ago, I wouldn’t mind being taken out of 1,000 shares of Citi at $3.39. It would be fine if I had to deliver on the contract tomorrow. It is a heck of a premium for 1 day. Granted, earnings are tomorrow.

If it dips prior to the close, I will still be looking to cover for a small gain.

I covered my calls on C.  Bought 10 calls back at $0.24 ($24) per contract.

Net profit after trading fees was $167.   I think that this contract is likely to drop to about $.05 by the end of the day tomorrow, but I would rather take my profit.

As a buddy of mine says…

You’ll never go broke taking a profit!

Sold 10 April $4.00 calls on Citi at $0.44 per contract.  By selling the calls, I am essentially betting that the stock will go down.  By doing this at the open, I got a great price due to the gap.  GS helped the financials at the open, but the economic data pulled things back to reality.

Sold 10 @ $0.44 netting me $423 (after trading fees).

If Citi remains below $4.00, I won’t have to deliver.  I do hold the underlying shares so these are covered calls (as opposed to naked).  However, with earnings looming, I might just decide to cover these contracts.  If they get dow to the low teens, I’ll take my $250-$300 and run.

4/15/2009 Update. Might have missed my exit on this one.  I had an order to cover at $0.21 per contract to net a couple hundred dollar profit.  It came within $.02 of that.  Back up to $0.32 now.   Since I have the underlying shares, I can’t really lose on this.  This trade going bad is essentially like getting $4.44 for 1,000 of my shares.  If you offered me that a week ago, I would have jumped at it.

Covered call writing can be a good way to generate income on your portfolio assuming you would be OK with losing the underlying shares at the strike price pluse the premium you took in.   In my case, I have 1,000 shares with a basis below $3.00 a share.   I sold 10 calls with a $4 strike for $0.44.  If C jumps, I will have to deliver the 1,000 shares (100 per contract).  I will essentially be getting $4 + $0.44 = $4.44.  (strike plus contract premium).