Bought two lots of SLV at 15.74 and sold June 16 calls for 38 ea (45 delta strike). The IV was >20% today.
The position break even is reduced to 15.36 with a 4% max profit on the break even cost.
At 60 days to expiry, this yields 25% at an annualized rate.
Ideally the cost basis on the position can be further reduced after June with additional calls sold...
Going monied, small on this beaten-down brick and mortar ... . Looking for a minor seasonal bounce.
Metrics:
Probability of Profit: 60%
Max Profit: $25
Max Loss/BPE: $3.25
Break Even: 3.25
* -- Options For the Small Account
I have touched on this topic before in separate posts, but thought I'd refresh the notion of what I like to call "strategic acquisition" here, since I get repeatedly asked about how I go about acquiring shares in an underlying I actually really do want to buy and hold, usually for an indefinite period of time (we're talking years here). The focus of these...
SOLD -1 GILD 100 17 NOV 17 90 CALL @1.00
Adjusted Cost Basis $87.70
Just a few hours ago I didn't see any chance of turning a profit on this investment any time soon. Unexpectedly the stock rallied over 7% today (now up 25% off lows) and above the average year end analyst target.
Expected Outcomes:
- With selling off the 'unlimited upside', if GILD is above...
I'm fading the Ackman dumpage here with a small position bet that price will stay clear of $10 through April 21st expiry ... .
Bought 100 Shares
Sold April 21st 10 Call
Whole Package: 9.38
Max Profit: $62 per 100 shares/contract
Max Loss/BP Effect: $938 per 100 shares/contract
Continuing to work this high IV underlying here ... .
Metrics:
Bought 100 Shares at 7.76
Sold Oct 21st 8 call
Whole Package: 7.14 debit
Max Profit: $86 per 100 shares/contract
ROC: 12.0%
This is a little gold miner than came up on my high implied volatility screeners (the others were AUY and KGC).
Metrics:
Bought Shares at 5.82
Sold Oct 21st 6 call
Whole Package: 5.35 db
Max Profit: $61
ROC: 12.1%
It was either this little fella or X ... .
Bought 100 Shares at 4.60
Sold the Oct 21st 5 call
Filled for a 4.29 debit
Max Profit: $71 (if called away at 5)
ROC: 16.6%
Taking advantage of this "little" dip here to initiate a covered call in this little, high implied volatility bugger (at some point, I'll make the move to "quality" ... ).
Metrics:
Bought Shares at 4.73
Sold Oct 21st 5 call
Whole Package: 4.40
Max Profit: $60
ROC: 13.6%
Let's start with the metrics for this setup:
Buy shares at 24.54
Sell Nov 18th 22.5 short call
Whole Package/BE/Cost Basis: 20.40 db per 100 shares/contract (20.40 is also your cost basis and break even)
Max Profit: $210 per 100 shares/contract (if called away at 22.50)
ROC: 10.3%
Now, ordinarily, I like to do "OTM" (i.e., out-of-the money) covered calls where...
I'm working a lot of these out of a "weenie" account, so a lot of these are going to be "weenie" sub-$10 plays ... .
Metrics:
Bought 100 Shares at 3.30
Sold Oct 21st 4 call
Whole Package: 2.95 db (2.95/share is my cost basis)
Max Profit: $105 (if called away at $4)
ROC: 35.6%
Okay, okay, okay ... . It is likely that this company is a ginormous turd pile, but the implied volatility in it is high, so I'm pulling the trigger here on it as a small speculative trade.
Metrics:
Bought 100 Shares at 1.61
Sold Oct 21st 2 call
Whole Package: 1.37 db
Max Profit: $63
ROC: 46%
In and out of this little fella last month, back into it this, as implied volatility in the underlying remains high, and I don't have to do all that much due diligence, since I already know what's in the pipeline, etc.
Metrics:
Bought Shares at 5.27
Sold Oct 21st 6 call
Whole Package: 4.82 db
Max Profit: $118 (if called away at 6)
I figured I'd clean up this setup a little bit on the chart to show what's going on with this trade a little more clearly, since we're running into opex, and I'll have to do something with it here shortly. I also for mapping out what I'm going to do if price does certain things relative to my cost basis and original stock purchase price.
The trade originally...
Looking to either (a) keep the premium; (b) get put the stock cheaper, after which I'll proceed to sell calls against ... .
Metrics:
Probability of Profit: 75%
P50: 84%
Max Profit: $59/contract
Break Even: 13.41
