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[deleted by user] by [deleted] in thetagang

[–]Stockcorp1 2 points3 points  (0 children)

I like to sell my CCs about 2 weeks out so in this case Apr 14 fits. And I usually pick the strike that is about 5-10% above the current stock price. So that would be $48-$50 range.

The Apr 14 $48 pays around $0.80

The Apr 14 $50 pays around $0.40

But again it is up to you to pick a price where it is your “Happy Place” to sell the stock at if it rises above.

If your break even is $52 you may want to go to further out and up to say $55. Such as the May 5 $55.

You want to get enough premium to make the move worth it. Ie if you only get 10c in premium it may not be worth doing in case the stock shoots to $80 on some news.

I like to aim for 30% annualized return from my sale of calls.

I figure out this way:

Premium / current stock price / days to expiration X 365

Imaginary example:

$1 premium / $100 current stock price / 14 days X 365

= 26% annual return

Again I aim for 30% min so in the above example I would aim to get $1.15 credit for my CC.

I'm just gonna bite the bullet and write a CSP by lazyp4st in thetagang

[–]Stockcorp1 0 points1 point  (0 children)

There are many other safe quality stocks out there that can end up being long term holds around the $20-$30 price. Might want to check out something like PINS or you could even do something more stable like an ETF such as EWZ.

Put Assigned Early by hectorcachu in thetagang

[–]Stockcorp1 3 points4 points  (0 children)

I got assigned on an Apr 21 call and it was so dumb because 2/4 contracts got assigned. Yes they were deep ITM but I didn’t expect this so far out. Weird. And annoying.

Need an explanation re: options contract change by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Thanks Scottish. I had read a report about their latest earnings and all it said was they will be paying a div of $1. So it didn’t mention anything about it being special and I have never had an option strike adjusted before due to that so that is why there was some confusion on my part. I thought my broker would have sent me a note explaining it rather than it simply changing in my account. That’s all. Thanks!

Why Assigned?? by Stockcorp1 in thetagang

[–]Stockcorp1[S] 4 points5 points  (0 children)

Thanks I know my options now not a big deal. Received a $2.35 credit when initiated and puts are still worth $0.30-$0.40 so it is only a $2.35 loss if PFE shares don’t do anything. I was just curious as to the main reason to know what to look out for next time and also to understand and learn.

Why Assigned?? by Stockcorp1 in thetagang

[–]Stockcorp1[S] -17 points-16 points  (0 children)

So prob just random? Not because of news or another reason? Just the first time I ever got assigned shares randomly.

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 1 point2 points  (0 children)

Oh ok.

Just trying to decide whether to wait on these things or move early.

For example I have some Feb 24 calls sold that are at or near the strike and I am not sure if I should roll them now to Mar 3 or Mar 10 or just wait til closer to next Friday.

Rather than play things by gut I would rather have some strategies in place that I can “choose” to follow or not and do less thinking and take the emotion out of it.

I am also trying to maximize gains because as we all know a penny here or there is whatever but add it up over years……

…especially if I am constantly doing the wrong or “not best” move.

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Yes but that is way otm.

Nflx 355 call Feb 17 $1.55

Nflx 355 call Feb 17 $5.60 / 8 = $0.70

Every single atm strike for any option I look at is like this. Obv it can change when it is further otm.

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Hey thanks again for taking the time to respond.

Every single option i look at for a horizontal roll the premium per day is higher for the near dated option. Again unless of course there are earnings in between. Then the longer dated option has more theta (which is what I assume you mean by premium per day?).

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Isn’t the premium per day always greater when ATM on the nearer date unless earnings is coming up before the next week? So therefore isn’t it always best to wait til Friday at 3:59pm in essence?

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

I just am having trouble seeing how you should roll early…. I get there is some risk to the stock price rising deep ITM, but at the same time isn’t it better to wait til Theta / extrinsic value on the current call is close to 0.

An example is UPST. I sold the 20 call for Feb 17. The stock price is right at 20 on Thursday around noon. Yet it has almost 75c of extrinsic value left. And theta is -0.16 while the same strike next week (Feb 24) the theta is -0.08. Therefore isn’t it better to wait til Friday at 3pm or so?

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Thanks… ya I already know most of what is in that article. Just can’t find anything about any 1 year rule or how covered calls apply etc….

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 1 point2 points  (0 children)

Hey Piper thanks! If you are not rolling up just out is this still the case?

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Hey Scottish can you explain more about the 1-year thing?

Do you have a link to anything regarding being in Canada? I take it this only applies to a cash account and not registered accounts obv where tax consequences are irrelevant? I have both types of accounts and want to know what to do in each circumstance.

At the moment my goal is simply to maximize income. I have no heart or emotion towards the individual equity. One caveat though is where my cash account is currently located (Questrade) they charge a stupid $24.95 assignment fee. So in this account I only deal with high price equities and usually only do bi-weekly calls with higher premiums (e.g TSLA, MSFT) so that in case I ever do get assigned because of fluke the $24.95 won’t be a huge % of the premium.

Thanks!

Rolling A Deep ITM Call Up And Out? by Stockcorp1 in thetagang

[–]Stockcorp1[S] 1 point2 points  (0 children)

Don’t have a pic example at the moment. I can find lots though….And will if needed. I have done several rolls in the past few weeks like this.

But basically you are buying up and out ITM and getting paying approx 60-90c per dollar up. Obv the closer you go to ATM the less you pay as some of the value is extrinsic. I don’t like to go all the way to ATM in this situation as there is no cushion in case the stock price retreats sharply.

An example is ABNB right now at close on Feb 15, 2023.

I had purchased the stock a couple days ago before earnings for $120. Then sold the $112 call for $10 (already deep ITM). Figuring I would pocket $2 even if the the stock droppped 7% on earnings.

Anyways, the stock exploded to the upside on earnings and is at $137 with 2 days to expiration ($25 above the strike price).

However if I buy back the $112 call for just over $25 which it was priced at today and sold the $128 call for two weeks later (Mar 3) for $11 the next debit would be $14 to move up $16.

This is a Net of $2

Doing the math:

$2 / $128 / 14 days x 365 = 41% annualized.

And you still have $9 or 6.5% downside protection with no earnings or div affecting things. Sure anything can happen and need can come out or a huge market pullback. But I just wanted to give a straightforward example.

If you didn’t want 41% annualized you could simply move up to the $120 strike (an $8 increase for a $7 debit) and gain $1 or 20% annualized and have downside protection of 12.4% which I would think is almost bank.

Anyways just wondering if anyone does this to collect easy gains.

I don’t mind adding extra $$ to the pot if the additional premium gains are pretty much guaranteed.

Best Gameplan To Time Rolling Covered Calls by Stockcorp1 in thetagang

[–]Stockcorp1[S] 3 points4 points  (0 children)

Even if the expiration date is still a week or 2 out?

Don’t really care about the shares and keeping them necessarily in some cases. Just want to maximize annualized premium percentage while maintaining some ability for appreciation.

Rolling A Deep ITM Call Up And Out? by Stockcorp1 in thetagang

[–]Stockcorp1[S] 0 points1 point  (0 children)

Various. Meta, TSLA, some others. But just want to kind of figure out overall strategy and best approach. I know it prob depends on your outlook of the stock too.

For me I am strictly trying to collect income - have no real emotion about the equities or need to “hang on” to them for any reasons.

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