Call it greed or call it savvy investing, I just couldn’t help myself and bought 200 shares of SWN at about $45.00 and sold September $45 strikes for $5.54. That’s not a typo I sold the calls for $5.54 to rake in $1,100 and September is only 7 months away. I normally don’t ever do covered calls on stocks but I made an exception this one time because of several factors:
1. There is a high probability that these natural gas heavy companies will be picked up by a major.
2. The premium here is a bit ridiculous at 12% for just 7 months away.
3. I believe we are possibly getting to the bottom of this recession and the climb back up might start this year.
4. If the recession is coming to an end, then energy demand will rocket and I’m trying to capitalize on that now!
We’ll see how this pans out in a few months. BTW, if SWN tanks, I will buy back the calls cheap and hold for the long term.
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