With an implied volatility rank of 70, an implied of 63, and a 10%+ return for the nearest out of the money short call, S meets my criteria for a decent covered call play (plus the darn thing's so cheap).
Buy 100 Shares S at 3.85
Sell 1 Feb 19 4 short call
Entire Package: $358/contract
Max Profit: (If Called Away at 4) $42/contact
Buy 100 Shares S at 3.85
Sell 1 Feb 19 4 short call
Entire Package: $358/contract
Max Profit: (If Called Away at 4) $42/contact
Comment:
Covered the short call for a .05 debit. Given the fact that my cost basis in my shares is 3.85/share, I'm going to wait for a bounce to either sell the shares outright for a profit or sell additional calls against my stock position. It doesn't make sense to sell calls at the 4 strike 45 DTE right here, since you can only get about .08 for them at the mid.
Comment:
Sold a Feb 26th 3 short call for .30 credit; as noted in my USO covered call roll down, you generally do not want to roll to a strike that is below your current cost basis ... .