Tuesday, January 11, 2011

Options are weird...

As you may recall I purchased 75 SuperValu (SVU) Jan 2013 $15 LEAPS back in December.  The contract price back then was $.50, so including commissions my cash outlay was $3,810.  Back when I purchased these LEAPS SVU stock was trading around $8.60. 

Earlier this morning SVU released earnings and they were absolutely horrendous, in fact as I type the stock is down about 13% to $7.50.  HOWEVER, I was actually able to sell my contracts for $.70 today, which after commissions came to $5,195!! 

So, just to recap, in the past month SVU's stock has fallen about 15% while the LEAPS have gone up 36%... did I mention options are weird?