Covered Call - KSS

Trend

The cyan rectangle shows the sideways trend of KSS.

The purple vertical bars mark 10 days before earnings. During these days no new trade can be entered for that ticker.

Other Considerations

KSS is a very volatile stock. It reflects in the options. Getting 80c for 1 week on a 30$ stock is more then 2%. For those stocks I like to see a dividend on top of it. In case I end up with an investment (my rules do not have a stop), I'd like to get paid for it. Now, dividends of course can get cut. Right now the yield is 6.5%. 

KSS has some problems. It used to me by favorite store to shop in. The number of racks has been reduced and my most favorite clothing line Apt. 9 no longer exists. 

The Trade

I prefer to enter my trades on Friday. I bought 100shares for $30.65 and sold next week Friday (9/16) 1 strike out of the money (31 Call) for $0.81. 

If called out the return ($31-$30.65)*100+$81 = $116. $116/$3065 = 3.78% for the week,

If not called out the return is $81/$3065 = 2.64%

Trade Maintenance

When the order filled, I add a closing order to buy back the short call GTC (Good Till Canceled). My broker has the option to send me a text message when an order fills. So if the within a day or 2 the closing order fills, something is up and I check the charts.

I can now sell another option to get more income. If I sell the stock as well is a discretionary decision. At the latest in November I review all "left over" tickers and see what can be used for tax loss harvesting.

 

Disclosure

I have been beneficially long the shares in KSS and short the call in KSS. I wrote this article myself and it expresses my own views and opinions. I am not receiving any compensation for this. I have no business relation ship with any company whose stock is mentioned in this article.

I am not an investment advisor or professional. This article is my personal opinion and experience and is not meant to be a recommendation of the purchase or sale of a stock or option. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters.