Not sure it was the right time to let the shares go…..but had to manage margin creep up do to “roll ups” on Friday.
I established a CC + Put Protection (*.98) strategy for SDC. SDC has moved up from $9.72 to $12.10. I rolled the short calls from $9.50 to $11 to $12. The Put was at $8.50 and it is now worth $0. Would you usually roll the Put up when the stock runs up as the appreciation is no longer protected or just let the stock get called (assuming it stays above $12) away and do a reset.
Thanks Option Iceman.
We have been tracking our REGN BuCS since it was established on Oct 12. It remains a challenge…..
STO ABT Oct 30 $111 Call Credit $1.31 to reestablish covered call yesterday
Sharing current covered call positions in IB account along with graphs showing the progression of the return on each position. Left money on the table as stock prices have run past our strike prices on almost every position.
We like to find young medical device companies with innovative technology that we can write covered calls against. ATEC looks promising. Great revenue growth and really nice margins.
Options are monthly….not ideal but they don’t take much work.
Short options have helped but hard to offset $50 drop in stock price.
NIO is looking like a good stock for CC strategy. Lots of volatility on the stock, good premiums on the options. 8.9% return in 29 days…..so far. Had 1,000 shares called away at $17.50 and replaced them and doubled down with 2,000 shares and covered with Sep 18 $18.
Defensive roll down to protect what has been a profitable trade over the past 123 days. $3200 was down to $2 offering minimal downside protection. Over the past two weeks I have rolled down from $3400 to $3300, $3200 and now $3000. Roll downs have helped ….much more fun rolling up!
Baxter had a nice jump in stock price the last couple of days closing at over $86 yesterday. We were short Aug 28 $83 and $83.50 calls. Plans were to roll the options up and out (diagonal) today and hope the upward momentum continued. Stock goes Exdiv today with a dividend of $.245 which we intended to capture. Made a mistake not rolling up to “out of the money” strike price yesterday and lost the dividend ($367) as a result.
We may replace the position today. Baxter doesn’t have the volatility (lower return on covered calls) but it pays a solid dividend and is a good core healthcare holding.
All the positions below are part of covered call strategies across three accounts. Assigned on a couple I wasn’t planning on. Just couldn’t get all the trades done. Internet at the cottage in Canada is functional….but not ideal.
Our Covered Call strategy on ABT was established with the purchase of 300 shares on May 26. Since that time we have added to the position with 300 shares on 6/25 and 400 on 8/21. Covered Call strategy on Abbott has performed well aided by an upward move in the stock. We have rolled the options 13 times and had two expirations. Abbott is attractive for CC Writing as it trades weekly options, potential for growth on the stock price and pays a dividend.
SDC stock dropped following the recent earnings call. SDC covered calls have generated significant profits in my Schwab accounts. The drop in price created an opportunity to establish new covered calls in IB account. SDC has an interesting business model (changing the paradigm in the orthodontics). Two members of our family have had positive experiences with using the system.
The covered call positions were established with the purchase of 1,000 shares on the 8/17 and another 1,000 shares on 8/18. On 8/17 we sold 10 Aug 21 $7.50 calls followed by selling 10 Aug 21 $8 calls.
We liked the potential VIAC represented (believe the idea came from Coveredcalladvisor.com)
- Weekly options
- Great dividend
- History of stock growth
- Good option premiums
We opened a CC position on Jun 4 with the goal of capturing the $.24 dividend (Jun 12) and the option premium. Stock quickly jumped up in price and then fell back below what we paid (blue line in chart below). After the stock price fell and our Jun 19 $24 call expired at $0 we didn’t sell additional options hoping for stock price to rebound. On Jul 14 we started selling calls again. We have done calendar rolls at the $25 strike price each Friday.
In 70 days the position has generated profits of $5,050, 21.3% or 111% annualized. Very pleased with the return on this quality stock. I think it is a great CC candidate. Plans are to continue to roll the calls and capture the upcoming dividend in Sep.
On Friday SDC stock closed above our strike price of $8.50 resulting in stock being assigned. Purchased the stock on Jul 13. Adjusted our option position on a weekly basis. Diagonal down from $9 to $8.50 on Jul 17 and Calendar rolls on Jul 24, 31 and Aug 7.
On Friday PTON stock closed above our strike price of $66 and stock was assigned. We purchased the stock on July 20. Calendar roll on 7/24 and Diagonal Roll up from $63.50 to $66 on Jul 31. We had an order in for a diagonal roll up on Aug 7 but didn’t get filled resulting in the assignment. Intend to establish a new covered call position in PTON today.
On Friday ISRG closed above strike price of $675 resulting in assignment of the shares. Shares were originally purchased on June 1. Over the 67 days we held the stock we adjusted our position on a weekly basis as shown in the table below.
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.
Bizarre market. Friday….Diagonal roll up $20 for a $7.49 credit with the stock at $422. $36.84 of premium……where is this market heading????
Options added to profitability in 24 of 28 positions. Overall large gains in stock price in DXCM, AMAZ and SDC create a loss on the options. Covered calls most successful in most conservative account (Schwab 401(K)) where they generate almost 50% of the profit.
P/L from stock and option does not always equal net P/L due to contribution from dividends.
- VIAC 6/19 $24 net $22.14
- MO 6/19 $41 net $40.05
- SJR 6/19 $17.50 net $17.18 (pays monthly dividend)
Recent run up in stock to $8.66. Details on the CC position established in April are below.
- 12/12 Positions have cumulative net profit. Source of profit:
- 4 stock driving profit
- 4 short options driving profit
- 4 stock and options driving profit
Overall net profits would be higher with just owning the stock (driven by DXCM and EW). Removing DXCM and EW from the calculation we have $19,000 in profit ($9,004 from stocks, $10,000 from short options).
6 positions assigned. 3 positions expired. 1 Diagonal down.
Moved to the cottage in Canada on Thursday. Issues with internet and couldn’t get trades done to roll positions and avoid assignment/expiration. Managed to get Schwab trades done but ran out of time with IB :(. Love the cottage…..hate the service.
DXCM has been on a wild ride since early March with a low of $182.07 and a high of $428.59. The increase has made it a significant percent of my account. Interesting challenge to manage. Protect on the downside after such a run up and leave some upside. Getting called away will trigger a capital gain that I would prefer to manage over time (make it long term).
In mid May I switched to a “ladder” of strike prices under the stock price to increase the protection. I was not able to protect all of the gain. The stock has dropped $90,775 in value. Options have increased in value by $59,625 for a net loss of $31,510. The position has a profit of $90,305 in 44 days.
The current position is below. 4.8% protection and 2.8% upside. Options are all Jun 19 expiry (monthly only).
Not sure if I have done the right management. If I had known the stock would go on such a run I wouldn’t have sold the calls to start with! Hope this might help someone manage a similar position. Comments/suggestions are welcome.
Good day yesterday for WFC. Likely have to roll up from May 22 $24.50 to get it back positive but nice to see the change in direction.
- CVX – Roll Out May 15 $95 to May 22 $95 for $.37 per share credit.
- DXCM – Diagonal Roll Up From May 15 $350 to Jun 19 $380. Increases our profit potential if called away by $30. Required an investment of $15.73 per share.
- EW – Roll Out May 15 $220 to May 22 $220 (hoping for stock appreciation). $1.10 per share credit.
- HAL – Option Expired – Look to write new call on Monday
- ILMN – Diagonal Roll Up from May 15 $330 to May 22 $335 increasing our profit potential by $5 per share. Required an investment of $.90 share…..great trade.
- PTON – 2 Diagonal Roll Up from May 15 $33 to May 22 $45. Increases profit potential by $12 share. Required investment of $11.18 share. Not a great trade. Further PTON upside may be limited based on low premiums that were available.
- PTON – 3 May 15 $40 Call options called away as stock was at $48. Probably not replace the stock.
- SDC – May 15 $7.50 Call options expired (stock below $7.50).
- SDC – Sold May 22 $7.00 Call options to reestablish covered call. $.37 per share credit.
- STE – Rolled Out May 15 $155 Call to Jun 19 $155 for $5.28 per share credit.
- T – Rolled Out May 15 $29.50 Call to May 22 $29.50 Call for $.09 per share credit.
Company conducting clinical on corona virus (similar to Gilead). Wouldn’t hurt to cover the back door with some of the premium.
BYND Rollout $125 to May 15 $130 $1.65 Credit
ISRG Diagonal Up May 8 $500 to May 15 $530 $26.55 Debit
SDC Diagonal UP May 8 $7.00 to May 15 $8 $.29 Debit
SDC Diagonal Up May 8 $7.50 to May 15 $8 $.12 Credit
New CC 1 Amazon May 15 $2380 Net $2344 Net
ET Diagonal DOWN May 8 $9 to May 15 $7.50 $.40 Credit
WFC Diagonal DOWN May 8 $27.50 to May 15 $27 $.18 Credit (Hopeful thinking?)
CAH Diagonal UP May 8 $47 to May 15 $49.50 $.80 Debit
CC strategy left a lot of money on the table with the big run up. Maximized the profit on the position ….but tough to leave the $ on the table.
14.7% Return in 21 days….would take that any time.
Should have rolled up prior to earnings announcement and again yesterday after strong opening. I would like to have a position in PTON and continue writing. I rolled PTON up in other account…caught sleeping on this one.
Call expired last Friday, was hoping for a rebound to sell into
Significant investment to maintain CC positions. Don’t want stock called away due to tax implications. Share of account value getting too high.
BTC May 15 $310 sold at $35.03 and closed at $62.95
BTC May 15 $320 sold at $27 and closed at $53.32
STO May 15 $350 at $28.24
STO May 15 $360 at $21.32
Leaves CC’s with strikes at $330, $350, $360.
Lost stock to assignment on the weekend
CVX Diagonal May 1 $85 to May 8 $90 Debit $2.66
DXCM – no action – May 15 Exp
EW Expired – Did not roll, write if stock strengthens
HAL Calendar May 1 $9 to May 8 $9 $.19 credit
PTON – Diagonal Up May 1 $31 to May 8 $32 $1.95 credit
ILMN Expired – Did not roll, Write if stock strengthens
STE – No action – May 15 Exp
T – Calendar May 1 $29.5 May 8 $29.5 $.32 credit
Eight of nine positions making money. One losing position is on medical supplies company that was granted temporary approval to re-sterilize N95 masks! Overall net profits still positive but dropped about $3,000 from Thursday to Friday. My Schwab account does not have 8 of 9 positive positions!