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

We have been tracking the daily profitability of 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.

WDC

Western Digital Reports Fourth Quarter and Fiscal Year 2020 Financial Results
News Summary
— Fourth quarter revenue was $4.3 billion , up 18% year-over-year (YoY).
Data Center Devices and Solutions revenue grew 32%, Client Devices grew
19%, and Client Solutions declined 9% YoY. Fiscal year 2020 revenue was
$16.7 billion , up 1.0% YoY.

— Fourth quarter GAAP earnings-per-share (EPS) was $0.49 and non-GAAP EPS
was $1.23 . Both GAAP and non-GAAP EPS include $96 million in costs
related to COVID-19 in the fourth quarter. Fiscal year 2020 GAAP EPS was
($0.84) and non-GAAP EPS was $3.04 .

— Generated operating cash flow of $172 million and free cash flow of $261
million in the fourth quarter. Generated operating cash flow of $824
million and free cash flow of $1.1 billion in fiscal year 2020.

— Expecting first fiscal quarter 2021 revenue to be in the range of $3.7 to
$3.9 billion with non-GAAP EPS in the range of $0.45 to $0.65 . Non-GAAP
EPS outlook includes costs related to COVID-19.

SPX trades

#SPX7dteLong I am not buying a spread for next Wednesday because, like last Friday, it is going for over 19.00. I don’t know why this is, as I was able to buy Monday’s spread for only 16.65, which is perhaps the least I have ever paid. I SOLD one on Friday, but that spread will be a loss unless we drop into Friday’s close. Friday is the unemployment report for July, so it could be a wild day.

Expired: $SPX Aug 5th 3245/3265 call spreads for max credit of 20.00. Condors bought last Wednesday for 16.85.

#SPX1dte Expiring: Aug 5th 3220/3240-3345/3365 condors, sold yesterday for .85.

TQQQ

BTC August 7, 65 puts at .01, sold at 1.05 and that is it until next week.

Hello BOIL our old friend…

Probably not the best trade in the world but the big move up in nat gas is screaming “fade me”. At least I thought I heard that.

So keeping with the promise I made to myself of not selling naked calls on these leveraged commodity ETFs, I decided to sell a call spread, the 12/18 60/70 bear call spread for 1.30. Kind of kills the appeal of these since you could sell the highest strike in December, 90 calls, for 3.75 or so. But those days are over. The other drawback is liquidity so if this thing rockets up again there might be some slippage in getting out. We’ll see what happens.

WDC Earnings

#ShortPuts #Earnings – A small shot out a couple weeks…

Sold WDC AUG 21 2020 40.5 Puts @ 1.01

#boredtodeath

ROKU Earnings

#ShortPuts #Earnings – Can’t believe I’m selling this strike but here goes. Right at the expected move but still above the 50ma. Sure looks extended to me…

Sold ROKU AUG 21 2020 140.0 Put @ 2.75

AAL

New diagonal spread to go along with my covered Calls
Sold AAL 08/07/2020 14.0 Calls / Bought AAL 10/16/2020 25.0 Calls @ 0.04 Credit.
Rumors of further airline bailouts. The 2 day calls are quite rich with the stock at 12.50.
Another #BoredToDeath trade

#shortputs X It’s not in…

#shortputs X

It’s not in the league of a short strangle in AMZN, sold an Aug. 21, 7 put for .28.

ATVI

#ShortPuts #Earnings #OneNightStand – Thanks for playing! I’ll call you in 3 months.

Bought to Close ATVI AUG 21 2020 76.0 Puts @ .30 (sold for .98)

LVGO

#ShortPuts – Adding the other side of the TDOC merger. Both stocks down and nobody’s happy so I’m happy!

Sold LVGO AUG 28 2020 110.0 Put @ 2.30

AAPL

Apple received a rare analyst downgrade on Wednesday morning from Bank of America, as the market capitalization of the equity approaches an all-time high $2 trillion.

BofA analyst Wamsi Mohan downgraded Apple’s stock to “neutral” from “buy”, citing rapid multiple expansion that has pushed valuations to rich levels. Besides the downgrade, the analyst increased his price target from $420 to $470.

Mohan said Apple shares are trading at the highest premium to the S&P500 in a decade, and now represents 6.5% of the market cap of the entire S&P500.

#eyeroll

VIAC Earnings

Anyone playing this one?

SPY

Rolling one of my long Call Up and out.
Sold to close SPY 08/21/2020 325.0 Call / Bought SPY 10/16/2020 336.0 Call @ 0.30 Credit.
I got a double on my 325 long.

I continue to sell very short term SPY calls against the longs hoping for a decent pullback some day.

VXX

Sold 08/07/2020 27.00 Puts @ 0.56.
Sold against 2021 Long Puts already paid for with earlier diagonal spreads.
#DoubleDip

LULU call spread

$LULU Up today now seems to be slowing down. Fading the move by selling 8/21 365/375 bear call spread @ 1.34 credit. Not getting 1/3 the width of the strikes because I’m considering this to be more of a synthetic short call, with a long call to reduce buying power. Short call at 32 delta.

TRADE:

THC STO 8/7/20 30.0 CALLS @.50

TRADES:

APT STO 8/7/20 22.0 CALLS @.30
CC BTO STOCK @20.82
CC BTO STOCK @21.20 now overweight

TDOC

#ShortPuts – Thanks @jsd501 for pointing this one out. Added to my watchlist now.

Sold TDOC AUG 28 2020 175.0 Put @ 3.30

CODX Puts / OLLI Calls

#shortputs
$CODX STO 8/7 27 put at 1.50

#coveredcalls
$OLLI STO 8/21 110 call at 1.80

AMZN

In my IRA,

BTC August 21, 2650/2700-3700/3750 Iron condor at 1.50, sold at 3.05

I am following the TT of 50% profit or 21 days to expiration.

TRADES:

GDX STO 8/7/20 45.0 ATM PUTS @.52 Worst case scenario, I bought the stock a little cheaper. ;>)

MRNA

#ShortPuts – Just a small one. Down after earnings so selling just outside the expected move and well below the 50ma…

Sold MRNA AUG 21 2020 60.0 Puts @ .96

Another DOCU rollup

$DOCU Rolled the bull put spread side of my iron condor up again, from 8/21 205/195 to 220/210 @ 1.87 credit. Put spread side has been rolled up 3 times and now total premium is 8.20 against 10 point wide wings so I will let this position sit with a now max loss of 1.80. Will look to close out for a profit if the opportunity arises before options expiration.

TDOC

STO September 18, 200/180-260/280 iron condor for a 8.25 credit, you can do better now.

ROKU earnings analysis

#Earnings $ROKU reports tonight. Below are details on earnings one-day moves over the last 11 quarters, representing its entire history of earnings reports.

May 7, 2020 AC -7.88%
Feb. 13, 2020 AC -6.32%
Nov. 6, 2019 AC -16.01%
Aug. 7, 2019 AC +20.85%
May 8, 2019 AC +28.11%
Feb. 21, 2019 AC +25.23%
Nov. 7, 2018 AC -22.29% Biggest DOWN
Aug. 8, 2018 AC +21.31%
May 9, 2018 AC -1.71%
Feb. 21, 2018 AC -17.71%
Nov. 8, 2017 AC +54.93% Biggest UP

Avg (+ or -) 20.21%
Bias 7.14%, positive bias on earnings.

With stock at 166.00 the data suggests these ranges:
Based on current IV (expected move into Friday per TOS): 146.03 to 185.97 (+/- 12.0%)
Based on AVERAGE one-day move over last 12 quarters: 132.45 to 199.55
Based on MAXIMUM one-day move over last 12 Q’s (54.9%): 74.82 to 257.18
Based on DOWN max only (-22.3%): 129.00

Open to requests for other symbols.

WDC earnings analysis

#Earnings $WDC reports tonight. Below are details on earnings one-day moves over the last 12 quarters.

April 30, 2020 AC -12.15%
Jan. 30, 2020 AC -2.18%
Oct. 30, 2019 AC -16.90%
July 31, 2019 AC +3.00%
April 29, 2019 AC +1.28%
Jan. 24, 2019 AC +7.52% Biggest UP
Oct. 25, 2018 AC -18.18% Biggest DOWN
July 26, 2018 AC -7.73%
April 26, 2018 AC -7.99%
Jan. 25, 2018 AC +1.82%
Oct. 26, 2017 AC -2.53%
July 27, 2017 AC -7.54%

Avg (+ or -) 7.40%
Bias -5.13%, strongly negative bias on earnings.

With stock at 45.00 the data suggests these ranges:
Based on current IV (expected move into Friday per TOS): 41.39 to 48.61 (+/- 8.0%)
Based on AVERAGE one-day move over last 12 quarters: 41.67 to 48.33
Based on MAXIMUM one-day move over last 12 Q’s (18.2%): 36.82 to 53.18
Based on UP max only (+7.5%): 48.38

Open to requests for other symbols.

Square up

#Earnings “Square reported numbers a day earlier than expected after a media outlet leaked them.” $SQ

https://www.cnbc.com/2020/08/04/square-sq-earnings-q2-2020.html