[Buying to close short call position on Siebel Systems (SEBL)/Buy to close May 10 calls (SGQEB)/Limit $0.20/Day Order]
Dear Member,
On April 5th (two days ago), I sold the May 10 calls (SGQEB) on SEBL for 35 cents. Today, I am placing an order to buy them back for 20 cents and thus capture a profit of 15 cents a share. I had sold those calls against my Jan '07 12.50 calls so they were covered. At the time I sold the May's, I had an investment of $1.30 in the long position since I had rolled to the '07 calls from '06 and had sold calls against the '06 as well. In any event even though 15 cents doesn't sound like much, in this case it represents an 11.5% RETURN ON INVESTMENT IN ONLY 2 DAYS! (Commissions are always a consideration, and I would not be doing this if I weren't realizing a profit after commissions. Where I trade, I only pay $12.95 commission for up to 10 contracts).
I have chosen to do this buyback today because SEBL dropped and now seems to be bouncing so I am trying to find the optimum time and believe this may be it.
DISCLOSURE: At the time of publication, I own the Jan '07 12.50 calls and am short the May 10 calls on SEBL.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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