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Covered Calls

Stock Option Trades for the Week Ending June 18

Friday June 18, 2021

June 14

Corning (GLW) – Partial Covered Strangle

The price of Corning dropped by 4.3% and I had an open covered call so I sold some Jul-17 $39.00 naked puts for $0.40. I sold fewer puts than the calls I sold previously.

Corning Covered Strangle


American Eagle Outfitters (AEO) – Covered Call Opened

I bought shares of AEO and sold OTM Jul-17 $37.00 calls for $0.82.

American Eagle Outfitters Covered Call


June 17

Steel Dynamics (STLD) – Covered Call Opened

When I opened this trade, STLD was down 5.5% from the previous close so it felt very uncomfortable. I considered an ITM covered call but based on my short trade history, I know that I am likely to get better trade results with OTM calls so that is what I sold.

Steel Dynamics Covered Call


Barrick Gold (GOLD) – Covered Call Closed

One of the first covered call trades I initiated earlier this year was with GOLD when I bought the shares for $19.85. The first calls I sold expired worthless. I sold a second set of calls and bought them back. I sold a third set of calls and bought them back today. The net call premium received was $1.49 and the annualized trade return was a very healthy 50.5%

Barrick Gold Covered Call


June 18

Chevron (CVX) – Covered Call Opened

Late in the trading session, I purchased shares of Chevron for $103.73 and sold OTM Jul-16 $105.00 calls for $2.53.

Chevron Covered Call


NRG Energy (NRG) – Covered Call Closed

I sold Jun-18 $36.00 and $37.00 covered calls in May. Given that NRG closed at $36.80 today, some of my NRG stocks will be assigned. I will sell the remaining NRG shares on June 22. The covered call trade with a $36.00 strike price generated an annualized return of 56%.

NRG Energy Covered Call


Comcast (CMCSA) – Covered Call Closed

Comcast closed at $56.67 so the Jun-18 $55.00 covered calls that I sold will be assigned. This trade generated an annualized return of 32%.

Profitable Comcast Covered Call


Vale (VALE) – Covered Call Closed

My most profitable covered call trade for the June 18 expiry came from Vale which produced a 91% annualized return over a 22-day holding period.

Profitable Vale Covered Call


Closed Naked Puts

I bought to close naked put trades for SCCO and PENN. My other Jun-18 puts expired worthless. With 92 naked put trades closed, my average annualized trade return is 19%.

Naked Put Trade Table

Overall, I am pleased with the performance of my rules-based covered call and naked put trades. Of course, much of that is related to the broad stock market movements and those have been in my favour. In an upcoming post, I will compare the performance of my covered call trades against buying and holding SPY. Spoiler alert – my trades have outperformed.

For those of you who follow my stock option trades, I hope my posts inspire you to develop your own trading strategies which provide better returns than buying and holding the broad market.

All the best in trading and in life.

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Covered Calls

Stock Option Trades for The Week Ending June 11

Sunday June 13, 2021

June 07

Corning

I am leaning towards selecting covered call strike prices as close to 5% OTM as I can get with the strikes that are available and have good liquidity. With that in mind, I purchased shares of Corning at $43.40 and sold OTM Jul-16 $45.00 calls.Corning Covered Call

Home Depot

The share price of Home Depot fell since my purchase on May 28 and the Jun-18 $325.00 calls I had sold were down to 10% of the price I sold them for so I bought the calls back and sold my shares at a loss to close the trade.Home Depot Covered Call

June 10

Starbucks

Starbucks met my screener so I purchased shares at $112.15 and then sold OTM Jul-16 $115.00 calls for $1.55.

Starbucks Covered Call Trade Table

Partial Covered Strangles

I have open covered call trades on both Abbott Laboratories (ABT) and Gilead Sciences (GILD). Earlier in the week, I sold naked puts on both stocks to establish what I refer to as partial covered strangles since I sold fewer puts than calls.

As always you can view my open trades on the Open Trades page.

 

Market Meter

My Market Meter has moved up to a score of 5.

Market Meter

For reasons unknown to me, emails of my posts aren’t going out until Monday night even though I publish them on the weekend. For this post, I will include trades made on June 14.

June 14

Corning (GLW) – Partial Covered Strangle

The price of Corning dropped by 4.3% and I had an open covered call so I sold some Jul-17 $39.00 naked puts for $0.40. I sold fewer puts than the calls I sold previously.

Corning Covered Strangle

American Eagle Outfitters (AEO) – Covered Call Opened

I bought shares of AEO and sold OTM Jul-17 $37.00 calls for $0.82.

American Eagle Outfitters Covered Call

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Covered Calls

Stock Option Trades for the Week Ending June 04

Sunday June 6, 2021

June 01

Gilead Sciences Covered Call

I purchased shares of Gilead Sciences and sold OTM Jul-16 $67.50 calls for $0.91. With the $0.71 dividend included, the static price return will be 19.7%.

Gilead Covered Call

June 02

United States Steel Naked Put

I sold Jun-16 $23.00 puts for $0.39 which sets up a maximum potential trade profit of 1.6% or 36.8% annualized.

United States Steel Naked Put

June 03

Abbott Laboratories Covered Call

Shares of Abbott Laboratories passed one of my conservative and reliable screeners so I bought shares at $109.50 and sold OTM Jul-16 $115.00 calls for $0.92. As the call expiry date falls after the ex-dividend date, I will collect an expected dividend of $0.45/share setting up a potential trade static-price annualized return of 10.1% and an “If Assigned” annualized return of 53%.

Abbott Laboratories Covered Call

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COVERED CALL POSTS
NAKED PUT POSTS
SYSTEMATIC TRADE POSTS