Today I repurchased the four July 2010 True Religion puts I had sold naked on 12/7, for a net debit of $2,160, plus commissions. Following a string of better than expected retail numbers and general market optimism, True Religion's stock price has increased substantially over the last month. While I continue to like the stock's long term potential, I've decided to take the opportunity to lock in a substantial gain over a short time period, while decreasing my reserved cash balance. In the event the stock's price declines over the coming weeks, I may look to sell additional puts.
Net profit on the position was $896.30, and the position's IRR (including taking into account reserved cash) is the unhelpful 18,000%+.
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