Opening (IRA): SLV July 26th 25 Monied Covered Call... for a 24.26 debit.
Comments: High IV here at 36.4%. Using the July 26th weekly here for the setup, since this is one of those options highly liquid underlyings with both liquid monthlies and weeklies, and I like to attempt to keep things in that 45 DTE wheelhouse if I can.
Because of the size of this underlying, I'm looking to ladder out if we get continued weakness, but am fine with taking my Happy Meal profits and move on if that happens.
Here, I like the metrics of the monied covered call relative to a similarly delta'd short put, so sold a -75 delta call against a one lot to emulate a 25 delta short put's metrics, but have the built-in defense of the short call.
Metrics:
Buying Power Effect/Break Even: 24.26
Max Profit: .74 ($74)
ROC at Max: 3.05%
50% Max: .37 ($37)
ROC at 50% Max: 1.53%