I'm gradually working my way up the totem pole of underlyings for covered call possibilities, having started out this cycle with sub $5 possibilities, moved onto candidates in the $5-$10 range, and then into issues within the $10-$20 range.
Slightly above $20 a share (weighing in at $22.97) is TWTR, which currently has an implied volatility rank of 52 and an implied volatility of 61. The covered call setup looks enticing here, within break even metrics below the 52-wekk low:
Buy 100 shares TWTR at 22.97
Sell 1 Feb 19th 23 call
Total Package: $20.39 ($2039, making your break even $20.39 a share)
Max Profit: $261 (If called away at $23, a mere .03 away from current price)
Notes: This play straddles TWTR's earnings announcement on 2/4. Naturally, anything could happen there, but the general pattern has been for TWTR to "not lose as much as expected." In the rather ironic world of equities markets, coming in 3rd instead of 5th in a race is sometimes rewarded with a price bounce, which is what I hope for here (I mean, I'm only asking for .03 between now and expiration ... ). And then there are the old buyout rumors ... .
Slightly above $20 a share (weighing in at $22.97) is TWTR, which currently has an implied volatility rank of 52 and an implied volatility of 61. The covered call setup looks enticing here, within break even metrics below the 52-wekk low:
Buy 100 shares TWTR at 22.97
Sell 1 Feb 19th 23 call
Total Package: $20.39 ($2039, making your break even $20.39 a share)
Max Profit: $261 (If called away at $23, a mere .03 away from current price)
Notes: This play straddles TWTR's earnings announcement on 2/4. Naturally, anything could happen there, but the general pattern has been for TWTR to "not lose as much as expected." In the rather ironic world of equities markets, coming in 3rd instead of 5th in a race is sometimes rewarded with a price bounce, which is what I hope for here (I mean, I'm only asking for .03 between now and expiration ... ). And then there are the old buyout rumors ... .
Comment:
As usual, off market prices don't necessarily reflect what you'll get on a Monday market. Filled for a 21.48 debit ... .
Comment:
Rolled my 24 short call down to the 18 for a 1.48 credit, further reducing my cost basis.