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Option Traders Unite Forum > Most profitable way to close out a winning position?
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NYC_RN

Member since: Aug 09

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Rye Brook, NY
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Back at the end of January 09, I bought 3 DITM calls on USO with a strike price of 20.00 and an expiration date of January 2011. 

At the time I felt crude oil was close to a bottom.  My average price for the calls was about 15.00 and they are currently worth about 19.50.  My opinion now is that crude oil has had a remarkable run over the last seven months or so, but currently it is very overbought and that this is a good time to walk away.  If I closed the position out by simply selling the calls, I'd realize a profit of $1350.00 less fees, a tidy profit.

My greedy inner Scrooge McDuck can't help but wonder if there is a way to eke just a bit more profit out of this position.  I was thinking about selling some calls against the LEAP contracts, effectively turning it into a covered call play (a "fig leaf" I believe it has been christened).  Does anyone else have some suggestions?  I am a long time stock investor and trader but I am still pretty new to options.  I am looking forward to making one of my first options trades a winner, everyone that helps gets a gold star :)
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OldFart

Member since: Jun 08

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You can
  • Sell the calls
  • Move the LEAP to a higher strike
  • Sell some shares short against the LEAP calls
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    AdGuy

    Member since: Jul 07

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    Managing Partner, ad agency
    Age: 60's
    Naperville, IL UNITED STATES
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    Just happened across your post about the USO calls and wondered what you decided to do.
    They are now trading at $21.30. Did you perhaps just hold on to them?