Opened (IRA): TLT September 20th 89 Monied Covered Calls
Updated
... for an 87.83/contract debit.
Comments: Parking some cap in TLT while I go about "summer things." Selling the -75 call against shares to emulate the delta metrics of a 25 delta long put while having built-in short call defense.
Metrics:
Break Even/Buying Power Effect: 87.83/contract
Max Profit: 1.07/contract (ex. divvies); 1.38/contract (with divvies)
ROC at Max: 1.22% (ex. divvies)/1.57% (with divvies)
50% Max: .53/contract (ex. divvies)
ROC at Max: .61% (ex. divvies); .96% (with divvies)
These metrics assume that I'm only able to grab one divvy (i.e., July). It's possible that I'm able to grab July and August or July, August, and September, which will naturally increase the ROC %-age, but will generally money/take/run at 50% max after at least the July divvy drops. And ... you never know ... It's also possible that TLT might not cooperate and move back toward my short call strike and voila, I've got a poo pile on my hands.
Comments: Parking some cap in TLT while I go about "summer things." Selling the -75 call against shares to emulate the delta metrics of a 25 delta long put while having built-in short call defense.
Metrics:
Break Even/Buying Power Effect: 87.83/contract
Max Profit: 1.07/contract (ex. divvies); 1.38/contract (with divvies)
ROC at Max: 1.22% (ex. divvies)/1.57% (with divvies)
50% Max: .53/contract (ex. divvies)
ROC at Max: .61% (ex. divvies); .96% (with divvies)
These metrics assume that I'm only able to grab one divvy (i.e., July). It's possible that I'm able to grab July and August or July, August, and September, which will naturally increase the ROC %-age, but will generally money/take/run at 50% max after at least the July divvy drops. And ... you never know ... It's also possible that TLT might not cooperate and move back toward my short call strike and voila, I've got a poo pile on my hands.
Comment
7/1 dividend: .29/share; 229/ONE lot. Break even: 87.54 (including dividends).Trade active
In spite of this up move, the short calls are in profit. Rolling out to the October 18th 89's for a .39/contract credit. Break even: 87.44 (without dividends); 87.15 (with dividends).Comment
8/1 dividend: .31/share; 331/ONE lot. Break even: 87.23 (with dividends).Trade closed: target reached
Out at 50% max, closing for an 88.22/contract credit. .99 ($99) profit/contract; 1.13% ROC.Disclaimer
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