We have been tracking the daily profitability of our covered call positions for an extended period of time. Many of the positions have been rolled several times. If stock is assigned it was removed from the tracking and considered closed. The following positions are “open”.
Blue Line = Profit or Loss on stock
Orange Line = Profit or Loss on Option
Black Line = Net or Combined for Stock and Option.
If the Black Line is above the Blue Line the “covered call” is outperforming just owing the stock. If Black Line is Below Blue the stock is outperforming the covered call.
On 7/13 we established a CC on PYPL. Stock fell over the next couple of days. On Friday we opened a second CC purchasing the stock at a lower price and writing a lower priced option ($175). We also did a calendar roll on the $177.50 call options for a net credit of $2.04. PYPL has performed well during the COVID recovery as more people are seeking non cash payment methods (Venmo).
On July 17 our $93 call options were expiring “in the money” (stock above the strike price). Rather than have the stock called away we did a diagonal roll up to the Jul 24 $96 at a net cost of $2.50 (incremental investment. MDT has a good history and pays an excellent dividend (next ex-div date in late September.
Thanks to the website coveredcallsadvisor.blogspot.com for an excellent analysis on LNC. I followed the general recommendation for writing a covered call and it has worked out well. $400 of dividends and making money on both the stock and the options. Did a calendar roll out of the options to Aug 21 at a net credit of $2.70.
Friday July 17 …..weekly and monthly options expiring. Started the day saying this market can’t continue marching upward. Plans were to liquidate a few positions and sit in cash and watch. Emotion kicks in….and I mostly rolled my positions staying invested.
IB account continues to perform well. MTD it is up $6,284 or 2.75% vs S&P +1.74%.
We are profitable in 6 of 7 positions. EW stock price continues to lag and we have not been selling calls anticipating a rise in stock price. Time to either double down or exit.
Yesterday (7/8) we did a vertical roll on BCRX from Jul 17 $4 to $5. Net cost for the transaction was $.83. When we sold the $4 calls on June 19 the calls were “at the money”. We were conservative as the stock had been moving down. The stock has rallied to $5.43. Our deep in the money call was providing little additional upside. The position has generated a profit of $6,916 in 56 days, 18.3% or 119% annualized.