ADM expired out of the money over the weekend.
music selection: “Nightmare” — Avenged Sevenfold
weigh-in: 209.6 +2.8 – way too much turkey dinner!
ADM has been badly underperforming for me. I feel like I have stranded capital so I’m looking to exit the position gracefully. I am selling a near the money covered call that will result in a short term capital loss if exercised. I still believe in the long term prospects for this company as roughly a billion people will enter the global middle class in India and China over the next decade and they will surely use more grains. But I have to look after today too.
I sold ADM180105C00040000 for 48 cents a share. The expected return is 10.95% over 40 days. I will take a short term loss of 5 dollars a share if exercised. That will bring the cumulative loss on the trade including all premiums and distributions collected to 4.62%. It is unfortunate but I hope to get this capital back to performing shortly. I can also use the capital loss for tax purposes next year as I expect to have a much higher budgetary burden to provide for income tax provision.
There are no other trades today and I am following UVXY closely as I have until the 30th to exit the trade in my tIRA account. I should be able to eek out a small profit.
Devour your prey raptors!