Update on NIO Covered Call Strategy after 77 Days, Unrealized Profit of $15,175, ROI of 83.5% or 396% Annualized

The covered call strategy on NIO has been an interesting one to manage due to the volatility on the stock. Our return would be higher if we bought and held the stock (+$32,361). On 11/23 (see green section in table below) we added a new element to the strategy with the purchase of a Put hoping we can mitigate the impact of the price swings. In hindsight we overpaid for the “protection” of the put. So far the Put is doing what was intended as it gained value with the recent pull back in price.

Managing the covered call strategy on such a volatile stock is a wild ride. Time will tell if adding the Put element enhances the profitability. It does make us more comfortable to have the additional downside protection and protect the gains we have.

New Covered Call on NIO, after 7 days profit of $1,700, 12.3% or 642% Annualized.

On 8/20 we established a new CC on NIO purchasing the stock at $13.80 and selling Aug 21 $14 calls. Stock has significantly moved up closing yesterday at $19.88. We are making a profit of $1,700 on the position so far….but the return would be higher had we not covered the position. So far we have done a calendar roll on 8/21 and a vertical roll on 8/26. Planning on a calendar roll today. Option premiums will be high on this volatile stock.