NaughtyPines
Long

BOUGHT ZIOP COVERED CALL

NASDAQ:ZIOP   ZIOPHARM ONCOLOGY INC
Bought shares of ZIOP             at market open at 4.90, selling the Aug 19th 5 short call against, immediately reducing my cost basis in my shares to 4.20, so my max profit is $80/contract if called away at 5.

Thanks to TurboTech for spotting this high implied volatility premium selling gem!
Comment: In a perfect world, price will stay slightly below my short call (at $5) at expiration so that I can buy it back near worthless or it expires worthless. I can then sell another 5 call out farther in time, further reducing my cost basis or sell a call higher up the ladder ... . Been bopping around that $5 mark for a while here.
Comment: Covering here for a 4.86 credit with 9 DTE and price breaking above my short strike. I could have allowed it to be called away or rolled the short 5 out another month for a .25 ($25)/contract credit (I could have also rolled out and up to the 6, but in order to get a credit for that, I'd have to go to Oct). Since price has flipped back and forth over the short call, I figured I'd just money, taken, run.

Net profit equals debit paid (4.20) minus credit received (4.86) or .66 ($66)/contract (15.7% ROC), excluding fees commissions.
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