“Covered Calls” Outperforming “Stock Only” in 13 of 20 positions.

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.

401(K) Account

In 401(K) Covered Call strategy’s are outperforming just stock in 5 of 8 positions. 7 of 8 positions are profitable.

General Account

In the general account Covered Call strategy’s are outperforming stock alone in 8 of 12 positions. 11 of 12 positions are profitable.

Covered Call on PYPL, -$330 in 5 Days, -.4% or -27% Annualized.

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).

IB Account +49.5% vs S&P 500 +3.45%

Yesterday was a wild ride….too wild. End of the day we hit a new high in the account of $287,827. YTD we are up almost 50%.

New covered call on INMD bounced back yesterday and became profitable up $1,159 or 3.9% in one day or 1,440% annualized.

New position in PYPL is still negative $335 but improved from big price drop on 7/13. $265 in profit from selling the options is helping to offset the $600 loss in stock.

July 10 Week Ending – Activity and Positions.

  • 28 Positions across 3 accounts
  • 24 of 28 are positive
  • 6 positions assigned (shares called away as stock price higher than strike price)
  • 4 positions expired (stock price lower than strike price)
  • Selling options added to position profitability in 18 of 24 positions
  • Large positive moves in DXCM, AMAZ, SDC stock prices create overall losses on options
  • Schwab 401(K) (most conservative of the three accounts) gaining most advantage from covered calls contributing almost 50% of profits

Note: P/L from stock and option does not necessarily equal net due to contributions from dividends that are not split out.

Update on IB Account and BCRX, Vertical Roll $4/$5, Position +$6,916 in 56 days, 18% or 119% Annualized

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.