Exiting Penn West Expl. (PWE) … Sort Of

I have been looking to sell PWE around $20  for some time … for a rundown of my reasons, please see this article.  Investor optimism at the start of a new year provided that opportunity but instead of outright selling the shares (and missing out on future gains), I instead sold PWE $20 June 2012 call options for $2.00 premium — possibly adding a 10% gain to my exit. If shares close above $20 at the expiration date, I will be out of PWE at an actual price of $22. If shares fall  below $20, I retain the shares but note that I’ve protected my downside down to $18.  In the meantime, I will collect at least one more dividend (in addition to the payout this month).

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