Covered Call on CVS, positive contribution from stock, option premiums and dividend….Unrealized profit of $1,098, 5.1% return in 49 days or 37.8% annualized.
It doesn’t happen often when a CC position is profitable on the stock, option premiums and dividends. Our position in CVS is currently positive with all three. Early on the stock dropped (blue line) so we were losing money on the stock and making money on the options (red line). Recently the stock has run … Continue reading Covered Call on CVS, positive contribution from stock, option premiums and dividend….Unrealized profit of $1,098, 5.1% return in 49 days or 37.8% annualized.
Lumber prices are ridiculous….CC on WY (Weyhauser) ….can we make enough on the CC to offset some of inflated lumber prices on reno?
Lumber prices have gone crazy. Rather than complain about the prices we decided to establish a CC on one of the top lumber companies, WY. This “approach” has worked in the past with Peleton. We wanted to buy a Peleton so we set up a CC and paid for the bicycle 50x over. I don’t … Continue reading Lumber prices are ridiculous….CC on WY (Weyhauser) ….can we make enough on the CC to offset some of inflated lumber prices on reno?
The Value of Dividends with Covered Calls… an example with PBR
On April 6 we established a CC on PBR when we bought the stock for $8.43 and Sold Apr 16 $8.50 Call for $.17.When we set up CC we were planning to collect the $.29 dividend (ex date Apr 15). The stock dropped in value after we established the position (blue line in graph). Our … Continue reading The Value of Dividends with Covered Calls… an example with PBR
VIAC CC Recovering ….slowly becoming profitable
Patience with the VIAC CC is starting to pay off. On April 1 when we established the CC and bought the stock at $45.12 we thought VIAC had hit bottom….but the stock continued to decline (blue line showing profit/loss on the stock). Despite the drop in the stock we resisted the temptation to roll the … Continue reading VIAC CC Recovering ….slowly becoming profitable
Covered Call versus Covered Call + Bull Put Spread
The charts below show two investment strategies around Covered Calls. We had a similar outlook on both stocks when the positions were originally set up (bullish long term). Both stocks pay a good dividend. The top example is Abbott (ABT) and the bottom one is Lincoln Financial (LNC). With ABT we established a covered call … Continue reading Covered Call versus Covered Call + Bull Put Spread
SPY Ladder….More Learning….More Tuition Costs….after 74 Days
We continued with our SPY ladder. As IC’s approached 21 DTE we rolled them out or up and out. . Where possible we did a vertical roll on a few of the IC’s using the credit from the Put side to roll up the Call side (want to minimize any incremental investment so limited the … Continue reading SPY Ladder….More Learning….More Tuition Costs….after 74 Days
AMAZ Covered Call Strategy After 11 months and 100+ rolls
In May 20 we established a CC on AMAZ. Since that time we have rolled the short calls 100+ times. The goal has been to make the options “additive” to the profits. After 11 months the options are only contributing $2,543 to the position. When AMAZ price dropped the options helped offset some of the … Continue reading AMAZ Covered Call Strategy After 11 months and 100+ rolls
NIO Covered Call “hanging in” despite price drop, VIAC CC not working so well
NIO CC Strategy established 9/16/20 has been able to hold onto most of the profits (black line) despite the erosion in stock profits (blue line). NIO call premiums have remained at a reasonable level due to the volatility. As the stock profits declined the option profits (orange line) has been offsetting. Overall the position is … Continue reading NIO Covered Call “hanging in” despite price drop, VIAC CC not working so well
IB Account Update….Conservative approach over past two months has slowed growth
Our IB account has been “stalled” since early February. To protect the gains from 2020 the account went from carrying margin of $150,000 to $200,000 in cash. We missed the opportunity with the recent rally but feel comfortable that we protected the gains. We have opened some new small CC positions primarily in stocks where … Continue reading IB Account Update….Conservative approach over past two months has slowed growth
Update on ABT Covered Call….Earnings Announcement Today….Could be opportunity to add to position
Abbott is a good covered call candidate. In our IB account we purchased 100 shares on 4/1/21 and sold the May $120 Call option. We rolled the option to May $125 (if the stock drops today we might regret the roll up!). Our unrealized return on capital for the position is 2.4% in 18 days … Continue reading Update on ABT Covered Call….Earnings Announcement Today….Could be opportunity to add to position
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