For the longest time, my go-to to play gold is GLD, which is intended to emulate the price of gold bullion. However, this can tie up a disproportionate percentage of buying power due to the price of the underlying. Naturally, there are alternatives out there to GLD that are either ETF's (like GDXJ and GDX) or outright securities in companies that acquire,...
I have not played AA for it seems like eons. This is because my go-to, premium selling play for earnings is the short strangle, and you won't get sufficient premium out of a low priced underlying like AA via short strangle for the life of you. The other option, naturally, is a short straddle , but even then it's a slog to squeeze sufficient premium out of the...
I recently set up a covered call in UNG, with the short call strike at 8.00 (Feb 19 expiry). Price has hurriedly broken my short call strike and is "in the money." What do I do now? One option is to do absolutely nothing. After all, my expectation when I put on the setup was to get called away at 8.00 at expiry or take the whole setup off in profit prior to...
CNX has been totally hammered and with an IVR of 100 and an IV of 119, I can't resist a play. 100 Shares CNX at 6.61 1 Jan 15 7 short call Total Package: 6.00 debit ($600) Max Profit: (If Called Away at 7 -- $100, excluding fees/commissions).
With an implied volatility rank of 96 and favorable break even metrics for the setup, JCP presents a fairly decent covered call opportunity here. Buy 100 shares JCP at 6.63 Sell 1 Jan 29th 7 short call Entire Package: 5.94 debit ($594) (which will be your per share break even -- $5.94, which is slightly above the 52-week low) Max Profit: $106 (if called away at...
HUN (basic materials) currently has an implied volatility rank of 64 and an implied volatility of 60, and the premium to the call side for slightly out of the money calls is sufficiently rich to lower the cost basis in a long stock position to a favorable break even metric (Feb 19 12 short calls currently .77 at the mid price). Here's the basic setup: 100 HUN...
MW (retail/clothing) has had an absolutely brutal year, with its price-per-share shirt literally ripped off its back, plummeting from a high of $66.18 in June down to its current value just north of $15. With $1.00+ in premium to be had on the call side for the Feb 19th 16 call, it may be worth initiating a covered call here. 100 Shares MW at $15.05 1 Feb 19th...
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...
Recently, I've posted a number of ideas of covered call setups, but which one or ones do I choose? I can naturally try to put all of them on, but for various reasons I may not want to do that ... . So how do I cull out the wheat from the chaff? The UNG, GPRO, HUN, MW, and JCP ideas are the result of quite a bit of work already; out of these, are some better...
I've been looking at quite a few of these setups lately, so thought I'd post a bit of what I'm looking for in these. 1. Implied Volatility. As a premium seller, high implied volatility rank and high implied volatility in an underlying are my general signals as to whether to consider a trade. This is because higher implied volatility results in richer premium,...
Even though GPRO appears to be in a bit of a consolidative state here, volatility in the underlying remains high, with a currently implied volatility rank of 83 and an implied volatlity of 87. Translation: rich premium to be had. I currently have a short strangle on, so I'm not going to be putting anything on here, but I figured I'd share nonetheless. There are...
As I'm waiting to dry some powder out between earnings seasons, I'm boning up on options setup fundamentals (doesn't hurt to go over them now and again), new potential trading setup ideas and the like ... . I like this one where I just don't feel like tying up the buying power on an ordinary covered call ... . It's basically an uber long diagonal: ...
With SUNE still offering stellar premium for a slightly OTM short call, I'm taking another dip at the covered call well in spite of the fact that it has run up nearly 100% from its 11/19 low and before the volatility bleeds out of it: SUNE Covered Call 100 Shares at 6.25 1 Jan 29 6.5 short call Entire Package $491 (which will also be your cost basis in the...
Got put stock at $11.00 on 2/13/15 because of put sale. Cost basis is now $10.90 Risk is .46 cents. Covered call is 13 for March wk 1 .25 limit.