With the market looking ready to bowl over, and my preference for writing options instead of buying them, yesterday I sold to open 1 UTX June 55 call at $.70, and received $67.05 after commissions.
With UTX at 51.28 at close on Friday, this is only about 7.25% OTM, so it's closer then I usually write options for. However, with a month before next expiration, time decay will kick in soon and that should lower the cost. Of course, that is if volatility doesn't spike (which it seems like it will). However, a vol spike will only occur if UTX drops, so even that would be a good thing for this call.
This is also my first naked call! I thought about writing a vertical call spread for a credit, but this seemed like a better bet. I've got upside protection to 55.7, and UTX has to break through it's 200 day MA and it's 2009 high of 55.51 to put me at a real loss.
Until the S&P breaks down past 875, I'll hold off on 'shorting' anymore. If it can break past 875, I'll buy some puts and sell some more calls.
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