Market had a positive day yesterday which helped Abbott with the bounce back up. Abbott was up by as much as $4 yesterday.
We reestablished the covered call position selling October 30 $111 Calls for $1.31 when the stock was trading at $110.
The combination of buying back the Oct 23 $107 call, selling the Oct 30 $111 call and rebound in stock price added over $7,000 of profit to the position which is generating $18,342 in profit.
Buying back short calls when a stock drops isn’t an automatic strategy we employ….but when we are confident in the stock it can generate short term profit.
EW (Edwards Lifesciences) stock had a similar experience to Abbott yesterday after announcing good quarterly revenue and earnings. Stock dropped $4. With market poised to opend up it could follow a similar trend as Abbott….but don’t take this as a recommendation….just identifying a similar pattern on another high quality medical device company.