NaughtyPines
Long

CHK COVERED CALLS (LONG NATGAS PLAY)

NYSE:CHK   CHESAPEAKE ENERGY CORP
a year ago
Okay, so my long UNG             play didn't work out; after I entered the trade, NGAS continued to tank -- horribly, as forecasts for a mild winter came to the forefront and natty gas reserves continued to build to record levels. Ugh.

Nevertheless, i still want a natty gas long play. CHK             is the most beaten down price-wise of the top ten nat             gas producers, so it makes for a potentially cheap covered call play that offers a little bit more flexibility in terms of "working off" an error in timing the entry.

So, I'm diving in here, with the full expectation that this could dive further, in which case I will continue to sell short calls against the long stock position:

100 Shares CHK             at 4.47
Sell Feb 19 5 Short Call (.55 credit at the mid price)
$388 for a mid price fill (i.e., cost basis in the 100 long shares will be reduced to 3.88/share).
10 months ago
Comment: Rolling my 5 call down to the 3.5 for a .37 credit.
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