BTO* FXI April 17th 20.5 Monied Covered Call
... for a 19.90 debit.
Comments: Looking to establish a position in FXI over time on weakness via monied covered calls to emulate selling a 25 delta short put, but with built-in downside defense via the short call and to take advantage of call side IV skew.
The underlying also has a dividend that pays out in June and December, but with somewhat variable amounts and with the Dec distribution being far larger than the June one (e.g., 2022: June .145929; Dec .593146; 2023: June .154374; June .149 (special); Dec .6074). Consequently, I 'd be more interested in grabbing the Dec than the June, so may modify my strategy slightly to allow for the grabbing of those by selling an OTM covered call in those expiries instead of ITM so that my shares don't get called away before the divvies drop into my account.
I have an order in to open for 19.90, but may penny up to get a fill just to get a starter position on.
Metrics:
Buying Power Effect/Cost Basis in Shares: 19.90
Break Even: 19.90
Max Profit: .60 ($60)
ROC %-age: 3.02% at max, 16.2% annualized; 1.51% at 50% max, 8.10% annualized.
* -- Buy to Open
Comments: Looking to establish a position in FXI over time on weakness via monied covered calls to emulate selling a 25 delta short put, but with built-in downside defense via the short call and to take advantage of call side IV skew.
The underlying also has a dividend that pays out in June and December, but with somewhat variable amounts and with the Dec distribution being far larger than the June one (e.g., 2022: June .145929; Dec .593146; 2023: June .154374; June .149 (special); Dec .6074). Consequently, I 'd be more interested in grabbing the Dec than the June, so may modify my strategy slightly to allow for the grabbing of those by selling an OTM covered call in those expiries instead of ITM so that my shares don't get called away before the divvies drop into my account.
I have an order in to open for 19.90, but may penny up to get a fill just to get a starter position on.
Metrics:
Buying Power Effect/Cost Basis in Shares: 19.90
Break Even: 19.90
Max Profit: .60 ($60)
ROC %-age: 3.02% at max, 16.2% annualized; 1.51% at 50% max, 8.10% annualized.
* -- Buy to Open
Trade active:
Filled for 20.00 even.
Trade closed: target reached:
Hit 50% max, closing for a 20.25 credit. .25 ($25) winner. 1.25% ROC.