Who wants to buy high and sell low?  Why would anyone buy calls before the closing bell and sell them to someone for half price the next morning when the opening bell rings?  When would anyone feel okay about buying for 88 cents and then selling for 45?  Answer: When the calls are just a wrapper, a box designed to keep something else safe while in transit, like a shoe box protects the merchandise on the delivery truck so that your purchase isn't thrown on the porch one shoe at a time by the people in the step van.  Of course, that shoe box may convey to you an unflattering, ill-fitting pair of shoes you don't like or aren't ultimately able to use, but it may surround and present you with just the thing you were looking for; you may have something valuable in your hands that needed some insuring.

On Wednesday, April 19th just before the close, I decided to take a short position in UVXY.  Because I didn't want to spend a lot of time or put a lot of money at risk waiting to see if this short would produce gains for me, I decided I would limit the losses a wrong-way short might put me in line for and I bought calls at-the-money expiring just two days later.  The shares were shorted at the price of $20.08, and I bought one 20 strike call for Friday's expiration at the option price of 0.88 or $88 for every hundred shares of stock.  At the very worst, if UVXY would rise and never come back down to refuel, I'd be able to exercise my calls on Friday and turn that into a buy-to-cover at the price of 20.00, which would actually net me an 8-cent profit per share.  So it would be an expensive shorting venture, bringing in only $8 per block of 100 shares on the short and paying $88 to make sure I wouldn't have to buy the short back at some damaging, unpleasant or downright scary price which could be any price, really, when you're thinking about UVXY.

So, of course I didn't really want to pay that much, and I had in mind the idea of selling puts at the next strike down, so that I'd have the chance to bring in some profit on the short shares, but I'd also be able to pay myself back for the calls I had just bought.  Problem:  19.50 strike puts were going for prices not high enough to fully pay myself back, so I thought I'd wait until the morning and see if better prices could be found then.  So I kept these short shares with only protective calls to accompany them overnight.

In the morning, UVXY had dropped so sharply that I abandoned the idea of selling puts and instead covered my shares at 19.40 for a 68-cent per share profit, or $68 per block of 100 shares, and then I disposed of the calls by selling them to whoever shelled out 0.45 per contract, and against the 0.88 I had paid, that was 0.43 I recovered or $43 per contract.  Setting my final cost of $45 per contract against the $68 per block of 100 shares I brought in, that ended up being $23 per block of 100 shares on this short, and I was pretty happy with that.  Considering that the trade was opened a few minutes before closing time and in the can a few minutes after opening time, that's not bad for a coffee and ding-ding (closing bell and opening bell) trade.