Partial Covered Straddle With Newmont Mining (NEM)

by | Apr 5, 2021 | Uncategorized

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As noted in an earlier post, I purchased shares of Newmont Mining and then established a covered call trade by selling May-21 $60.00 calls. Today, I sold some May-21 $60.00 puts but fewer than the number of calls I sold. This position is what I call a partial covered straddle. Had I sold the same number of puts as calls then it would be a covered straddle.

If you aren’t familiar with covered straddles (let’s be honest, they aren’t that common), here is a definition from Investopedia:

covered straddle is an option strategy that seeks to profit from bullish price movements by writing puts and calls on a stock that is also owned by the investor. In a covered straddle, the investor is short on an equal number of both call and put options which have the same strike price and expiration.