Treating Covered Call positions as a mid term strategy versus “one and done” trades.

Many investors who utilize options like to “trade” versus considering the positions to be mid/long term strategic investments. Our preference is to invest time picking a stock to sell covered calls against and maintain the strategy over an extended period of time. Five current open positions we have “worked” over previous 91 to 138 days are shown below. The black line represents the current profit from the position. The calls we used to “cover” the stock evolve depending on how the stock is performing. Some weeks we roll up or roll out or write a calendar spread. If the stock drops and we remain optimistic on the stock we might not write options for a couple of weeks waiting for a bounce back up. At the bottom of the DOCU example I have included a table that includes the trades.

The daily profitability for DOCU position are listed below. Under the Comment column you can see the evolution of the calls used to cover. Options trade weekly and trades shown were week to week.
DateStock P/LOption P/LDaily P/LComment
6/28/20$0$0$0 
6/29/20$1,239($321)$918 
6/30/20$1,401($186)$1,215 
7/1/20$3,426($1,634)$1,793 
7/2/20$7,035($5,829)$1,206Diagonal $170/$190
7/6/20$6,936($5,492)$1,445 
7/7/20$9,063($6,422)$2,642 
7/8/20$11,643($8,747)$2,897 
7/9/20$13,464($10,470)$2,994 
7/10/20$12,771($9,429)$3,342Diagonal $190/$200 Debit $5.50
7/13/20$6,744($6,482)$263 
7/14/20$8,067($6,677)$1,391 
7/15/20$7,587($5,831)$1,757 
7/16/20$7,254($5,523)$1,731 
7/17/20$8,661($5,667)$2,994Calendar $200/$200 Credit $4.19
7/20/20$10,335($6,057)$4,278 
7/21/20$10,047($5,615)$4,433 
7/22/20$10,932($5,930)$5,003 
7/23/20$9,285($4,880)$4,406 
7/24/20$7,023($4,149)$2,874Calendar $200/$200 Credit $2.76
7/27/20$8,619($4,149)$4,470 
7/28/20$8,757($4,149)$4,608 
7/29/20$12,483($4,149)$8,334 
7/30/20$13,920($4,149)$9,771 
7/31/20$14,787($7,764)$7,023Diagonal $200/$212.50 Debit $6.50
8/3/20$17,622($9,729)$7,893 
8/4/20$18,042($9,962)$8,081 
8/5/20$17,544($9,444)$8,100 
8/6/20$14,442($6,728)$7,714 
8/7/20$11,166($5,553)$5,613DiagonaL $212.50/$202.50 Credit $6.37
8/10/20$9,252($4,436)$4,817 
8/11/20$7,284($3,770)$3,515 
8/12/20$7,728($3,683)$4,046 
8/13/20$9,552($3,723)$5,829 
8/14/20$9,651($3,389)$6,263Calendar $202.5/202.5 Credit $4.24
8/17/20$12,048($4,356)$7,692 
8/18/20$12,465($4,559)$7,907 
8/19/20$12,201($4,319)$7,883 
8/20/20$14,091($5,631)$8,460Diagonal $202.5/$210 Debit $3.05
8/21/20$12,792($4,869)$7,923 
8/24/20$11,088($3,828)$7,260 
8/25/20$11,265($3,609)$7,656 
8/26/20$14,030($4,929)$9,101 
8/27/20$14,169($4,727)$9,443 
8/28/20$14,310($4,816)$9,494Diagonal $210/$215 Sep 18 Credit $10.38
8/31/20$16,638($5,910)$10,728 
9/1/20$30,378($18,225)$12,153 
9/2/20$29,286($17,385)$11,901 
9/3/20$22,341($10,965)$11,376 
9/4/20$14,610($3,984)$10,626 
9/8/20$11,427($1,905)$9,522 
9/9/20$13,275($2,115)$11,160 
9/10/20$11,523($1,193)$10,331 
9/11/20$9,120($371)$8,750 
9/14/20$10,623($221)$10,403 
9/15/20$10,344($104)$10,241 
9/16/20$8,844$58$8,903 
9/17/20$7,755$91$7,846Diagonal $215/$195 Credit $6
9/18/20$8,196$136$8,333 
9/21/20$11,244($1,716)$9,528 
9/22/20$13,377($3,336)$10,041 
9/23/20$13,254($3,134)$10,121 
9/24/20$10,863($891)$9,972 
9/25/20$13,466($2,928)$10,518Diagonal $195/$210 Debit $8.79
9/28/20$13,712($2,643)$11,069 

August Month End IB Account +$20,000, 6.5% ROI in the month

August was a great month in the market which is reflected in our monthly result. The account increased by $20,000 or 6.6% and outperformed the S&P.

Positions as we exit the month. All eight positions are making a profit. Four of the eight are more profitable due to covered call writing. The ($33,339) loss on writing options reflects our conservative strike prices (dominated by the ($47,059) loss on DXCM. It is hard to believe this market can keep going up and up. If we wrote more aggressive options (higher strike prices at or out of the money) our profitability would be higher…..but we will continue to be cautious and write mostly in or at the money options.