Monday, March 19, 2012

Out of Medco Health Solutions and Bad Timing on Motorola Mobility

“When in doubt close it out” as the saying goes with options trading. I held onto my Medco Health Solutions, Inc. (Ticker: MHS) one day too long. I was expecting to let my covered call expire and let them take away my Medco stock at $70. Medco closed in the money, but after the market close, Bloomberg reported that a couple of States we’re looking at filing lawsuits to block the merger. Of course the stock dropped in after hour trading so my covered call did not end up getting assigned. I sold my position in Medco this morning at $69.03 resulting in a net gain (including the proceeds from the covered call) of 1.86% or ~60% annualized return. So I can't complain too much...

Ooops, I was a bit off with my timing in Motorola Mobility Holdings, Inc (Ticker: MMI). Mofcom is extending their phase 2 review. I do believe this will close, but obviously not as soon as I had hoped.


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