Yesterday (yes I am finally caught up) I BTC 4 AA Oct 40 Puts and STO 4 AA Apr09 Puts for a net deposit of $497.99 in my taxable account.  My basis for these AA shares would now be 34.70 if assigned.

Although AA has been trending up recently I decided to reduce my chance of being surprised by an assignment that I don’t want at this time.  I haven’t mentioned it for awhile but I am still trying to reduce my margin exposure in this account.  I am doing that by not selling new puts, expiration of those puts that are out of the money and rolling out (and down where possible) existing in the money puts as they near expiration.  Rolling out increases my cash position and reduces my chance of being assigned in the near term.

I continue to hold three AA Oct08 35 Puts in an IRA account which I may allow to be put to me if they are still underwater as we near expiration.  If assigned to me I would then own a total of 500 shares of AA at an average basis under 30.  AA is trading at 32.40 at this writing.