Opening (IRA): SMH March 15th 176 Monied Covered Call
... for a 172.42 debit.
Comments: While I'm waiting for a July contract to open up in broad market instruments (IWM, QQQ, SPY), shopping around the ETF space for premium. Relative to broad market, SMH IV isn't horrible (the 30-day is currently at 29.3%). Selling the -75 delta call against long stock, to emulate a 25 delta short put and to take advantage of call IV skew (32.9% on the call side; 27.2% on the put).
3.58 max on BPE of 172.42; 2.08% at max; 1.04% at 50% max.
Will generally look to take profit at 50% max; roll out the short call to reduce cost basis further if it doesn't get there.
Comments: While I'm waiting for a July contract to open up in broad market instruments (IWM, QQQ, SPY), shopping around the ETF space for premium. Relative to broad market, SMH IV isn't horrible (the 30-day is currently at 29.3%). Selling the -75 delta call against long stock, to emulate a 25 delta short put and to take advantage of call IV skew (32.9% on the call side; 27.2% on the put).
3.58 max on BPE of 172.42; 2.08% at max; 1.04% at 50% max.
Will generally look to take profit at 50% max; roll out the short call to reduce cost basis further if it doesn't get there.
Comment:
With the absurd strength in the semiconductor sector, letting this run past 50% max ... .
Trade closed manually:
Out today for a 174.84 credit; 2.42 ($242) profit.