Covered call on SQRinse and repeat.
10 ema on a monthly should act as some resistance. But this is 20% higher AND its over earnings. We could GET up to this price, but how nice would that be?!??!
Coveredcall
BABA covered call againThis puppy is MOVING and I like it!!! :-) :-) I am in shares, been in them for a while. Bought some more sub $70 and feeling good about it. Only 3 weeks to expiration. I don't get a FULL 1%, but is' $20 higher , it's over earnings and BABA is pretty extended. I wouldn't mind getting called away here anyway, cuz I'm confident I could buy back cheaper.
Covered call on CCL A bunch of bull candles in a row. :-) Nice bounce, nice trend. I'm in 2000 shares and I'm net positive on them. Going to sell a covered call into strength over CPI. I like this move because it gives me a WHOLE $1.20 + .15 of room and only 3 weeks with one extra day of theta next monday.
Covered call on SQ againI am loving this move right now. Chart looks hella pretty. Selling Feb week 1 $81 call for $2.25. Throwing out a limit. It might fill today or later. Tell me why this chart looks so nice??? :-)
Opening (IRA): SPY February 3rd 398 Covered Calls... for a 376.09 debit/contract.
Comments: Mixing things up a little bit here and/or attempting to simplify my investment life going forward. Here, I'm targeting the 45 DTE short call strike paying around 1% of the strike price in credit; the Feb 3rd 398 short call is paying a little more than that -- 4.25 ($425).
The focus here will not so much be on my "principal" (i.e., the value of my stock position), but how much premium I can bring into my account over time on the short call side of things. Naturally, I will still keep track of my cost basis (376.09/share on fill), since you generally do not want to roll the short call to a strike that is less than your cost basis unless you absolutely have to.
I'll generally look to roll out the short call at 50% max to a similarly situated strike (i.e., 45 DTE paying 1% of the strike price in credit) or take profit on the whole setup if it converges on max (which would be 398.00).
Covered call on TSLAOn 600 shares this brings in about $1800 of "rent money"
I wouldn't not mind selling at $300. I would be profitable if that happens. Only 6 days of theta on this one ABOVE the 200 SMA and above a small down trend line.
Closed (IRA): IWM September 2nd 196 Covered Call... for a 191.42 credit.
Comments: (Late Post). Paid 187.73 to put this on. (See Post Below). Money, take, run today. 3.69 ($369) winner. Will look to re-up in the next couple of days, as I still have IWM short delta on.
Opening (IRA): IWM September 2nd 196 Covered Callfor an 187.73 debit.
Comments: Since I've got IWM short delta hedge still hanging out there and no remaining IWM short puts to offset, doing a heavy long delta covered call (it's 67.48 long delta). Will look to roll out the short call (currently marking at 2.42) at 50% max to a similarly delta'd strike at or above my cost basis.
From a price action standpoint, this isn't the greatest spot to "go long," so may not be suitable as a standalone trade unless you're the patient sort who is fine with reducing cost basis over time via roll of the short call and over (potentially) larger time frames.
$VEEV sold covered call 240 $VEEV - everything goes according to plan. We crossed the 200SMA, we might retest back there. There's a huge supply zone around $227-$240 where the stock is struggling today. I own shares and sold covered calls for August 19, 240 strike.
Covered call on BABASelling a call $25 higher than stock price now. This covered call will have two market closing days baked in AND it's above the 200 sma, less than 6 weeks of time AND I get paid more than 1%. Buy low, sell high.
Covered Calls in EnergyHow high will every go? I sold covered calls in XLE at 80 strike. This is a good position to be in. If it stays above 80 until mid June will buy back in. If below 80 will collect most premium and roll to July.
My last post one week ago was EXACTLY correct. I predicted everything nearly perfectly to my surprise.
I said we would probably either have a pump or a major dump. Not only did we majorly dump right before the pump, but the pump was with in my time frame and just barely broke over my designated price target.
I hope you all cash out in the morning.
Good luck apes!!!!
LFG!!!
My FUBO Weekly Covered Call ExpiredMy FUBO weekly 29 Strike Options Expired today. I collected $0.63 and stock that I bought at $28.63 was called away at $29.
On Monday Nov 1, I'll buy another weekly covered call and collect the premium. Hopefully the premium will be above 2%.
Rolling (Small Account): MJ January 21st 16 Covered Call... to April 14th 16 Covered Call for a .40 credit.
Comments: My cost basis in shares was 14.76 (See Post Below). Now it's 14.76 - .40 or 14.36. At the time of fill, the short call aspect of this setup was worth .97, so will look at the setup again when that approaches 50% max. I naturally don't generally like rolling out this far in time, but wanted to stay patient and mechanical.
Tutorial: How SMAC can help find the Ideal Covered Call StrikeQ3 Earning season is approaching fast
Background: The earnings covered call volatility play
------------------------------------------------------------------
one of the easy earning plays if you hold a portfolio of stocks (or if you're a fan of the wheeling strategy) is to sell Covered Call (CC) right before the earnings announcement - when the volatility is inflated and the premium price peaks - usually using weekly options - which then you can close immediately after the earnings have been announced, or just leave them to expire worthless if they end up out of the money (OTM).
When this play is done right, and depending on your position size, it can deliver few hundred (if not thousand) bucks literally overnight. When we design this play, we need to consider also the scenario that with the earnings announcement, the stock price may shoot over our selected strike, and we may end up getting assigned - and the stock is called away from us.
However, with the proper "design" of this trade play, you can set it up for a "no-lose" trade scenario
- if you don't get assigned, you keep all the call premium (not bad for a 2-day trade) - see example below - you still keep the stock.
- if you get assigned, you will earn the difference between the strike price and your breakeven *plus* the covered call premium -- so a winning trade in both scenarios.
if we can repeat this play for few stocks during earnings, the gain can accumulate and bring in a very "good month" for the trader who can master this play.
Using the SMAC to make this scenario easier
-----------------------------------------------------
One of the reasons i wrote the "Auto-stepping, Zero-lag Moving Average Channel - SMAC" script is to help me with trade scenarios like this. Let me share how.
- Assume i hold 1,000 AAPL shares in my portfolio.
- i just bought them couple of weeks ago - and i am planning to play the volatility and sell Covered Call into the upcoming earnings using the weekly options.
- my goal is either to collect the call premium and keep holding AAPL past the earnings - or to get assigned and sell the stock and realize a profit larger than what i would have got if i just bought then sold the stock direct
- my preferred strike "distance" is 5% Out of the Money (OTM) - which can give a reasonable value of premium while giving me room to still keep the stock if the price doesn't shoot that high due to the earnings.
- I plot my breakeven price on the chart - say for the example here, it's $143
- Add the SMAC to the chart and set the SMAC Percent Envelop to 5%
- This will immediately show what price range i should pick the Covered Call strike if i want a 5% OTM -- it's the $151 or the $152. Maybe i would pick the $152, cause if i get assigned, it would give me a larger gain on the underlying position.
Calculating the P&L for both CC scenarios is also easy now on the chart
---------------------------------------------------------------------------------------
- Not Assigned: after the earnings, the stock still closes below our strike - we can even leave the call to expire worthless - no commission paid - i keep the premium
assume the CC premium is $1.3 by the time i sell the CC & assume i have 1,000 AAPL shares, that's $1,300 over-night! = 1% return and i still keep the stock
- We get assigned
with the same assumptions above, we keep $152 - $143 = $9 + the premium ( = $10 bucks per share -- that's $10,000 in 2 weeks. around 7% return) - we can buy AAPL again later on a dip.
*** Big Note here
---------------------
Another scenario is, if my breakeven for AAPL is above the 5% strike price level, in which case, i would not consider this trade at all - because if i sell the CC and i get assigned, i would basically close my position at a loss - again, once i set the SMAC and my BE of the chart, i can easily see if that's the case and make a fast trade decision - here's how this would look on the chart
if you hold 1 or 2 positions in your portfolio - this whole SMAC / Chart thing may not be worth it - maybe a quick mental calculation or simple spreadsheet is easier :) - but if you hold 15-20 positions in your portfolio / multiple accounts, doing this fast during the earnings days and visually on a chart can save a good amount of time and give more confidence.
i hope this can inspire some fellow traders to share how else they can use the Auto-stepping zero-lag Moving Average Channel
Please do not treat this post as a trade recommendation - or as trading education - i'm just sharing thoughts and some of my limited experience - Please trade safely.
Rolling (Small Account): MJ October 15th 16 Call to Jan 21st 16... for a .68 credit.
Comments: There isn't any November or December monthly yet, so extending duration out to January. My original cost basis was 15.44/share (See Post Below). With this roll, it's now 15.44 - .68 or 14.76, so I could conceivably roll this down to 15 with "my next move" and still be selling above my cost basis. However, we'll wait and see if it continues to implode and go from there. The January 16 short call's value on fill was 1.08.
Opened (Small Account): MJ October 15th 16 Covered Call... for a 15.44 debit.
Comments: A small engagement trade in the small account ... . Here, going monied (i.e., the short call is in-the-money versus out-of-the-money), looking for MJ to stay above 16 running through expiry. Post-fill, entered an order to take it off for 15.95 (.05 short of max). That is unlikely to fill until the waning days of the short call contract when extrinsic in approaches nil, but you never know.
Metrics:
Max Theoretical Loss: 15.44
Max Profit: .56
Return on Capital at Max (as a Function of Max Loss): 3.63%
Return on Capital at 50% Max: 1.81%
Exercising: SOFI 2 x 15 August 20th Long Calls... and closing August 20th 20 Short Call and opening September 2x 20 Short Calls.
Notes: This is a trade that started out as a call ratio where I bought 2 x the 15's calls and sold a 20 call in the August 20th expiry, after which it promptly moved toward 15.
I'm inclined to think that it will need more time to work out, so exercised the long calls today to take on a two-lot of shares before more of the extrinsic value pisses out of them and then proceeded to sell calls against the two-lot in the September monthly. In a nutshell, I'm converting it to a 2 lot of September 17th 20 covered calls, which was basically my original plan if I didn't get a fairly immediate move.
Here's the math:
Original Setup: 5.79 Debit
Exercise of the Long Calls and Close of the August 20th 20 Short Call: 27.75
Subtotal: 33.54 debit ($3354)
Cost Basis Per Share: 33.54/2 = 16.77
September 20th 20 Calls: .60/contract Credit
Resulting Cost Basis: 16.17/share
And we'll see how things go from here.
NOV: 1-2yr Covered Call StrategyReasons for likely recovery :
Fundamental Analysis
- NOV suffered under major commerce COVID restrictions' impact on petro use.
- NOV is poised to recover with the opening of commerce. Petro sector is critical for both recovery and any developments in the ALT energy sectors.
- NOV supplies the equipment to the petro market, insulating it somewhat from the volatility of the commodity swings.
Sentimental Analysis
- NOV made a series of small acquisitions that will likely improve revenue.
- since NOV supplies equipment its major stock price rebound lags the recent run up in oil prices and will likely follow suit.
- NOV under-performance in recent earnings was already priced in and stock prices surged in-spite, a strong indicator of market confidence in future performance.
Technical Analysis
- NOV has recently tested its 200EMA, consolidated, and recovered ~21%;
- NOV just had a bullish crossover on the STC
- NOV also has been beating VWAP in its recent bullish trend
- NOV remains ~30% below its pre-COVID levels.
PLAN
Entry Price: $14-$15, average down to $13.5
TGT Sale Price: Conservative - $18, Moderate - $22, Final- Set trailing Stop
Stop Loss: $12
Max Position Size: 5% of portfolio
Note - NOV hosts weekly OPTIONS. Average in to 100 shares (+). Begin selling weekly CALLs @ 1 Standard Deviation above average purchase price, while collecting modest DIV. Try to sell after 365 for long terms capital gains but do not violate STOP.
Rolling (IRA): TLT June 18th 145 Calls to July 144... for a .71/contract credit.
Notes: A continuation of my TLT covered calls (i.e., shares of stock + short call). (See Post Below). With the 145's converging on 50% max, rolling out to the July 144's (28 delta) for a .71/contract credit. Total credits collected of 7.13 versus a short call value of 1.49 = realized gains of 5.64/contract so far on the short call premium end of the stick since December.
NOVARTIS AG, NVS - 4.0% in 35 daysI understand the euphoria of picking on a winning horse and getting returns in excess of or even more than 100%, but what you need to pay attention to is money management and managing your positions.
You can buy stocks, you can buy futures, you can buy bonds and you can buy and/or sell options.
The key is always to use the instruments that we feel confident in and to have the ideal timing.
It is never just one of these two individually.
In this case, we have opened a position in our portfolio on Novartis (NVS), which will surely generate us a 4% return within a month.
Our goal is always a monthly return between 4%/5% monthly which on a compound growth we get an average of 50%/60% annually.
NYSE:NVS
WMT Covered Call (Adding a second position)I am still holding my original WMT shares form my first covered call series of trades and hope to continue that trade soon with a new call. This trade is a second position of the same caliber. I bought 100 more share of WMT at $128.52, and sold a 128 call with expiration of 3/12/21 for a credit of $2.30 last week.
Break even for the trade is currently $126.46 and max profit in relation to entry of $130.82
TWTR: Covered Call into earnings: why & what's next?in this post, i quickly share why i love selling covered call into the earnings for stocks that i held for sometimes and i'm ready to cash out of.
I sold the Feb 12 Call option with strike $65 for TWTR yesterday for $2.20
Why ? how is this a good trade?
i believe selling CC into earnings is one of the lowest risk trades - it's a great weapon to add to your trade arsenal, cause we win in all scenarios .. here's the break down and the thinking behind this trade
(quick notes - i'm not an options expert and i exclusively trade the 4 basic strategies -- sell/buy calls/puts -- i don't get into spreads - but there are may resources that explain covered calls in a lot more details on the web if anyone is interested)
Scenario #1: TWTR closes below $65 on Friday Feb 12
if volatility (IV) is strong for the option ahead of earnings, which is usually the case for stocks like TWTR (and most other social media and tech companies), the option premium will reflect a higher extrensic value (vega) - once the earnings resuts are out, volatility drops, causing the premium to "go back to normal" price. for the sell side, that means easy profit (premium to keep).
in our case here, the premium for the Feb 12 $65 call was $2.2 (IV was ~180% when i opened the position) - if volatility comes down today to ~40%, the call option maybe worth $0.5 -- and with only 3 days to expiry, even that $0.5 would eventually drop to zero at expiry (provided TWTR remains below $65) - we end up keeping both the full $2.20 premium and the stock
Scenario #2: TWTR closes above $65 on Friday
we will get assigned and the stock is "called" away at the strike price $65 - keeping the call premium of $2.20
since we already had a good run with TWTR (see the breakeven / BE marked on the chart) and were ready to close the position at current price level ~$60, getting $67.20 is even a better deal.
Scenario #3: TWTR drops down after the earnings for any reason (was not expected)
The call price will drop and we will close it for profit and still continue to hold the stock - which is not a bad thing since we originally think TWTR is on a good path in future.
** note: TWTR is hovering around the $62 in after-hours/pre-market after strong earnings.
now for the price projection:
the projection for the current move for TWTR is $16 from the mid-Jan base of ~ $46 which takes us to around the $62 price level (+/- couple of $$) - then the price may ease up back to the mid $50's (the nearest supply/demand "balance level") before moving up again
(this is also why i thought the $65 strike with 3 days to expiry was the best choice)
the UTO (lower indicator) on the daily chart is reaching 100% -- showing that this is a possible top for the price and supporting a new wave of consolidation at that level - so seems to support our projection.
if our covered call gets assigned, we can then look for another opportunity (an upcoming dip) for re-entry to catch the next move. we remain bullish overall on TWTR.
this is my 4th covered call trade in this earning season and it's a great way to add to our PnL for stocks that we already hold, especially those positions we were looking at closing or rotating out of. this is a basic option strategy that is easy to learn and follow, with an opportunity to repeat every earnings - as rewarding as dividends if not more :) - so i hope it works for other fellow traders here and i hope i managed to explain it well .
let me know in your comments.
