jefflsmith 4:32 am on Tuesday, March 30, 2021
Tags: Assignment ( 174 ), DividendCapture ( 13 ), sleepatnight ( 2 )

Assigned on NUE…..evaluating dividend capture strategy on series of stocks to see if it is scalable…

https://coveredcallswithjeff.wordpress.com/2021/03/30/assigned-on-nue-covered-call-profit-of-240-in-6-days-1-return-on-capital-or-44-annualized/

#assignment, #dividendcapture, #sleepatnight

winstonthink 2:24 am on Wednesday, March 31, 2021

Hi Jeffl, I’m still working on the conundrum of income generation from dividend paying stocks with the addition of robust downside protection. Traditional covered calls don’t cut it – they provide scant protection for the massive trade off of sacrificing too much of potential profits. I’m gravitating toward buying the stock, buying 1 strike OTM puts 6 months out, and waiting until a significant upside move is made before selling the short calls. Then it’s a question of using the rawhide strategy.
I’ve used it on a few stocks now, see INTC trade.
Also used it on NUE:
Bought 12/17/2020; NUE stock @ $55.46
Bought 12/17/2020; NUE Jul 16 $60 puts @ $8.69
Sold on 03/26/2021; May 21, 75 calls @ $6.00

Theory being, the long put allows you to stay longer in the stock if it starts moving down soon after you have bought it – or simply and/or bail if you don’t get some fast upward momentum. Then move onto the next candidate.
<a href="“>#sleepatnight
@jefflsmith

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