Assuming the covered write was closed out near the middle of Friday’s range (0.50), our cost basis on the round lot still held has been reduced to 27.26. The stock looks like it could break either way this week, but I’d rather not chance getting ripped off trying to covered-write it again when the markets open Monday morning. Instead, I’ll suggest a lowball bid of 0.55 for a May 23 put at the 35 strike. If the order doesn’t fill in the first 10 minutes of the session, continue to bid it shading toward the bid side rather than the offer. Check back in the chat room as well, since I may be able to provide guidance for a covered write if this vehicle rallies. I’ve highlighted a tiny downtrending ABC pattern that could provide useful information today or tomorrow. Zoom to the daily chart and you’ll see that p=34.62 has already been breached, implying risk down to 32.12. _______ UPDATE (1o:32 a.m.): We benefited from market-maker sleaze, since, with the stock up on a gap at the bell, they ripped off sellers of our puts on the opening for 0.51. Now, offer a 34-strike put short for 0.60 against the one we hold, good till canceled. _______ UPDATE (May 20, 10:12 p.m. ET): Skip the spread-trade, since GDXJ is perched on ledge from which a fall could spell 33.13. Instead, offer the put we hold to close for 1.70. _______ UPDATE (May 23, 11:45 a.m. ET): The puts never traded above 0.75, and so I’m recommending blowing it/them out today for 0.15 to 0.20 (current market 0.10-0.20). This will effectively raise the cost basis of our stock to 27.66. _______ UPDATE (May 27, 12:01 p.m.): I’m taking this dog off the list, since maintaining a bullish position in a bearish stock takes too much attention and has worn me out. If you exit the position now at around 33.33, your theoretical profit would be a little more than $600 per round lot, since judicious profit-taking following a very well-timed entry had lowered our cost basis to 27.26.
