jefflsmith 5:02 am on Tuesday, December 1, 2020

Update on NIO Covered Call Strategy

https://coveredcallswithjeff.wordpress.com/2020/12/01/update-on-nio-covered-call-strategy-after-77-days-unrealized-profit-of-15175-roi-of-83-5-or-396-annualized/

smasty 11:18 am on Wednesday, December 2, 2020

I’m being much more cognizant now of the various intrinsic/extrinsic values of my collar positions. On a series reset, we’ve already talked about subtracting extrinsic value from the calls (*.98) for put placement…..however if I see a nearby put with less extrinsic value than in the short calls, I think it makes sense to choose that strike. More nuance 🙂 Or of course a very wide put credit spread that nets less extrinsic than the call sold.
- jefflsmith 11:21 am on Wednesday, December 2, 2020
  
  Your strategy saved me some money on NIO with the gain on the put and the gain on the short call almost offsetting most of the stock loss. Have to watch it over longer term to learn more but it was a good addition to the position.
- smasty 11:22 am on Wednesday, December 2, 2020
  
  Also, I definitely think overall you will see less return (in fact, much less) on collars vs. straight covered calls. At my age I just want more protection on my underlyings so I love the tradeoff. I don’t think I would have embraced this as much as I have had it not been for playing around w/ bond ladders a couple years ago when interest rates spiked for about 8 months. I realized how much I really like the low risk levels and regular income.
- jefflsmith 11:25 am on Wednesday, December 2, 2020
  
  I also rolled some put prices up when I rolled up short call strikes. I don’t like the “reset” where I lose the stock and calendar resets for long term capital gain. The stock was ILMN when it had a big jump earlier this week.