Selling EXC

I'm doing a little bit of spring cleaning, and after reviewing my portfolio I decided to throw in the towel and sell my EXC 2012 options.  The thing with options is you either win big or lose big, and after the fact your either look really smart or really dumb - in the case of EXC it's definitely the latter.  To summarize, I acquired these options in May of 2010 (click the "zz Exelon" label to the right to see the posts) for a total outlay $4,123.  My proceeds from today's sales is... wait for it... $528... ouch!

Oh well, I guess stupid is as stupid does.  Next time I'll have to remember to only buy stocks that are going to go up ;)

Questions?  Comments?  Email mevsemt@gmail.com

Transaction Alert: Exelon LEAPS Part 2

I just bought 10 contracts for EXC January 2012 $50 Calls at $2.00. I previously purchased 10 identical contracts earlier in the month, the only difference being that I paid $2.10. So, now I have a total of 20 contracts for EXC January 2012 $50 Calls.

Transaction Alert: Exelon LEAPS

I just purchased my first option - 10 contracts of "EXC January 2012 $50 Calls at $2.10." In other words, anytime between now and January 2012 I have the right to buy shares in Exelon for $50. Each contract includes 100 shares, and I bought 10 contracts, so my sunk cost in this investment was $2,100 (plus a small commission of ~$11).

Since the contract price was $2.10, I make a profit if the share price exceeds $52.10 (50+2.10). Due to the leveraged nature of LEAPS, for each incremental $1 above this price I make a $1,000 profit! My hope is the economy continues to rebound and both power prices and energy consumption rise along with it. If this happens my guess is EXC could be worth $60 to $80 a share, which would generate a profit of $7,900 to $27,900, respectively - not bad for a $2,100 investment.

On the other hand, there is a decent chance my investment thesis could be flat-out wrong. If this is the case and EXC never gets above the $52.10 threshold then I only stand to lose $2,100.