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