Update on the October Encana (ECA) option trade. Today I bought to close (BTC) the October option trade.

The cost of doing so was $41.24 (net), by buying back this option at .05 cent plus commission. ignoring the commission at this point allowed me to capture roughly 92% of the premium. As this option contract expires next Friday (Oct 19th) I felt that, with analysts raising their outlook for 2014's average natural gas price to $4.30 from $3.70 plus analysts this past week raised their target price of ECA to $22 per share over the next 12 months. We'll need to see if that'll materialize in the future as I still suspect that the $20.50 technical level will still be the top for this stock but, lets see what the market ends up doing.

If you're following ECA you would have noticed that ECA has had a really strong run this week as Monday the share price had a low of $17.57 and now has run up to $18.31 roughly 4% for the week. As on Monday I was expecting ECA share price to test the lower band range of $17.50 which it had gotten close to before rebounding back. I was also ready to purchase another 100 shares if it broke the 10% rule as set out in my guidelines.

Income and return for ECA this year is $304.80 in dividends and $960.04 from writing of covered call options, for a total of 1264.84 (net) or 13.19%.

Looking forward into next week, I'll be looking to sell another call option in either November or December expiry as the December option chains aren't listed yet and I'll be looking for the best price for my shares. Maybe Monday ECA will jump another 30 cents.  I'll keep you posted on my next option trade.

Till then happy trading.