Option Expiration Week

I have 2 options expiring this week. First a call on Silicon Precision Industries SPIL. I bought the stock at $9.91 and sold the $10 call. It is now well in the money and my return will be 5.10% for 58 days, or 31.8% annualized.

SPIL is a profitable chip packaging company out of Taiwan that seems to be growing nicely. It makes a nice covered call trade when the share price is near a strike price so you can get some decent time premium.

My other expiration is on Gigamedia GIGM.  I bought this stock (again) in May for $14.54 and sold the July $15 option. This stock is very volatile, and for the last week has been falling and is now trading around $13, so the position is currently at a loss.

I really like the longer term prospects of this stock. Its business is primarily Internet gaming and profits have been growing at triple digit rates. Current PE is 21. I have sold 4 options on the stock since February for a total of $3.50 in premium and have made about $2.50 on share price appreciation. In May the stock was called away at $15 and I bought it back a week later at the $14.54 price. After expiration I will look for another bounce up in price before selling another call, probably the Sept $15.


2 Responses to “Option Expiration Week”

  1. Learning Covered Calls Cash to invest « Says:

    […] Option Expiration Week […]

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