Here, I'm going covered call because ANF has a small divvy that I want to attempt to grab (.20/$20 per 100 shares), so I need to own the shares to do that. The record date is 3/3, so I will need to hold the shares until at least then. I'm going monied because I just don't trust this thing not to implode somewhat post earnings ... .
Metrics:
Probability of Profit: 73%
Max Profit: $52/contract (+$20 dividend)
Max Loss: $948/contract (assuming the stock goes to $0)
Break Even: 9.48
Notes: Naturally, I'm hoping that the 10 short call stays ITM post-earnings. If it doesn't, I'll be rolling that out to reduce cost basis in my shares. I'll otherwise look to take the trade off as a package for $10 after the date of record, since that's cheaper than being called away (for which there is an onerous fee).
Metrics:
Probability of Profit: 73%
Max Profit: $52/contract (+$20 dividend)
Max Loss: $948/contract (assuming the stock goes to $0)
Break Even: 9.48
Notes: Naturally, I'm hoping that the 10 short call stays ITM post-earnings. If it doesn't, I'll be rolling that out to reduce cost basis in my shares. I'll otherwise look to take the trade off as a package for $10 after the date of record, since that's cheaper than being called away (for which there is an onerous fee).
Trade closed manually:
Covering here for 9.80 for a small profit. Since I had the stock as of the date of record, I'll realize an additional gain of .20 ($20)/100 shares.