Opening (IRA): QQQ August 30th 405 Monied Covered Call
Updated
... for a 401.49 debit.
Comments: As with my IWM monied covered call, re-upping in QQQ in 45 days' duration with the short call at about the same delta it was in the setup I just took off with the basic goal being to milk a little bit more out of August without taking on additional risk. Here, re-upping at about the same short call delta actually results in a lower buying power effect and a lower break even.
Similar to the IWM setup, however, the metrics aren't sexy here as a standalone trade:
Buying Power Effect/Break Even: 401.49
Max Profit: 3.51
ROC at Max: .875%
50% Max: 1.76
ROC at 50% Max: .437%
Generally, 50% max take profit; roll out the short call for duration and a credit on side test.
Comments: As with my IWM monied covered call, re-upping in QQQ in 45 days' duration with the short call at about the same delta it was in the setup I just took off with the basic goal being to milk a little bit more out of August without taking on additional risk. Here, re-upping at about the same short call delta actually results in a lower buying power effect and a lower break even.
Similar to the IWM setup, however, the metrics aren't sexy here as a standalone trade:
Buying Power Effect/Break Even: 401.49
Max Profit: 3.51
ROC at Max: .875%
50% Max: 1.76
ROC at 50% Max: .437%
Generally, 50% max take profit; roll out the short call for duration and a credit on side test.
Trade active
With the sell-off and IV expansion, reducing risk while taking advantage of juicier premium due to the increased IV while simultaneously increasing my max and max ROC %-age: rolled the August 30th 405 to the Sept 20th 400 for 6.62 credit (i.e., a credit that exceeds the amount of strike improvement). 394.87 break even, 5.13 max, 1.30% ROC at max.Trade active
And rolled the in profit Sept 20th 400 down to the Oct 20th 390 for a 11.19 credit to reduce risk, increase my buffer against further down. 382.81 break even; 7.19 max; 1.88% ROC at max.Trade closed manually
Closing here near 50% max for a 386.48 credit. 3.22 ($322) profit. Will re-up in the October cycle here shortly.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.