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 :)



