On 11/16 we took a different approach to establishing a new covered call position on Smile Direct Club (SDC). The stock was beaten down after a good earnings call. Rather than buy the shares and sell call options we wrote Nov 20 $9.50 Puts for a credit of $.49. The stock went up and on … Continue reading New Approach to Entering a CC Position, Selling Naked Put, getting Assigned then selling Calls
On Oct 12 we established a BuCS on REGN purchasing May 21 2021 $600 Calls and selling Oct 16 2020 $620 Calls. Within a couple days of establishing the position the price of REGN deteriorated and has continued to remain down despite a couple of bounces. We rolled our short option position 9 times generating … Continue reading REGN Bull Call Spread……a challenge so far
Over the past month our IB account has reflected the market volatility. The account dropped from a high just of $347,000 to under $287,000 then bounced back to $315,000. In the charts below you can see the impact of the individual stocks. DXCM, SDC and PTON have had a rough couple of weeks. I will … Continue reading IB Account – Down from high, Up from Dip over past 30 days
Last week was a tough week for my covered call positions. Price decline in many of the stocks exceeded the protection offered by the call premiums. Over the past two weeks I would have been far better off with some “collars” (use call option premium to purchase an OTM Put option to establish a floor … Continue reading Tough Week…..and Oct month end
Dexcom announced excellent quarterly results…..which resulted in a $90 drop in the stock price. I copied the earnings announcement at the bottom of the post. How to react when one of our stock implodes ….. The “covered call” offered some protection (it was sold for $28.82 a share or $57,640 on 10/16) but the drop … Continue reading DXCM – Hard to Understand a $90 Drop and how we responded
Majority of trades on Friday were diagonal roll downs. AMZN, DOCU, PTON, BYND all had significant drops. DXCM had a good week which helped offset losses in other stocks. We rolled many of strike prices down to ITM/ATM strikes due to uncertainty heading into the election. The market is forecasting high volatility immediately after the … Continue reading Summary of account activity Wk ending 10/23 – risk and margin reduction via diagonal roll downs
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 … Continue reading Follow up to ABT post on 10/21 about buying back Oct 23 $107 Calls
Adjusting ABT Covered Call in reaction to announcement of good quarterly earnings and raised guidance…..and stock drops $2…..
Yesterday we adjusted our ABT covered call position based on the $2 drop following the earnings announcement. The earnings call was positive with the company communicating excellent results and increasing annual revenue and earnings guidance. So why the drop? Historically we have found opportunity when a stock we like announces good results and it drops…..usually … Continue reading Adjusting ABT Covered Call in reaction to announcement of good quarterly earnings and raised guidance…..and stock drops $2…..
All 14 positions in the account are profitable. Five (ILMN, LNC, MDT, MS, RGEN) are more profitable due to covered calls. The other 8 positions would have been more profitable just holding the stock (stock prices have moved up faster than planned in covered call strategy). On the weekend we had three positions assigned (ISRG, … Continue reading Schwab Account Wk Ending 10/16 – Trades and Positions +$24,245 or 1% in the week.
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