LVS - Covered Call - Update 2024-06-08 - Closed

Trade Update

On Friday the same story did almost repeat itself. At lunch time the I checked the trade and LVS was trading at around $45.50. With that price I will clearly get called out. If I buy back my short call, I have to pay at least 50 cents. I reminded my self, the goal of the plan is to get called out. 
My trading rule #1 is:

Plan the trade and trade the plan.

My trading rule #2 is, 

If ever in doubt follow rule #1

Shortly before market closing LVS was back to $45.05. Market closing price was $45.02. Now after market is considered as well. Literally it finished at $45.01 at the closing of after market. With that I am getting called out. 

The full numbers:
Invested: $4,446

return on call 1 : $45

return on call 2 : $68

capital gain on LVS: $54
Total return: $168

RoI: $167 or 3.7%

Duration of the trade: 2 weeks.

Of to the next trade.

 

LVS - Covered Call - Update 2024-06-01

Trade Update

Friday's market action in the last 30 minutes of trading was surprising. If I would have sat on my hands and done nothing until the last 15 minutes, I would have gotten better premium for rolling my short call. At closing LVS was at $45.03, meaning I would have gotten called out. Now, woulda, shoulda, coulda... I deal with my trades at lunch time on Fridays. 

I bought back my short call for 4 cents and sold next week Friday's (June 7) 45 call for 68 cents. 

Something else I would want to point out here. There is potentially a W pattern (orange lines) completing.  With the big run today, there is still some money to be made. If the W completes, the next target is the height of the W (about $3), so $50.

Disclosure

I have been beneficially long the shares in LVS and short the call in LVS. 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.

CMA - Covered Call - Update 2024-06-01 - Closed

The Trade

The market action Friday afternoon did surprise me. At around 20 min before closing the market ripped to the upside. Not that I am complaining, but that does not happen a lot. 

Over lunch I looked at my CMA trade. My short call was still costing to much to buy back the contract. I decided to let it expire worthless. So was the plan. Monday lunch time I would sell another call.  I was even tempted to sell a call on Friday and still let the existing one on. That means, I would only have 100 shares to cover 1 of the contracts and would have to buy 100 more shares on the open market to cover the other call. That would be a potential automatic loss. 

Remember: With selling a call, I am obligated to sell shares at the price defined in the contract. Where the shares are coming from and how much I paid for them, does not matter for the contract. 
So if I bought 100 shares for $50.58 and sell them for $51.00 I made money on the shares and I get to keep the money from the contract. Now if I sell a second contract at the same time for a later point in time, I may no longer have the shares and may have to buy them on the open market to cover my obligation. 

Now, the stock closed at $51.24 on Friday. That means I had to sell my shares at $51.00. Yes, I lost out on the other 24c a share, but they were never part of my plan. 

I bought 100 shares at $50.58. I sold this week Fridays (May 31) 51 Call for 55 cents. I got called out, tI had to sell my shares at $51. I get to keep the gain of 42c a share and the 55c from the short call. 42+55 = $0.97/50.58=1.91% ROI.
As a call requires 100 shares, I made 97$ in 1 week on a $5,058 investment. Now, this will not happen every week and stocks can go down to 0. 
The money is back in my account. I can look for the next trade.

Disclosure

I have been beneficially long the shares in CMA and short the call in CMA. 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.

 

LVS - Covered Call - New Trade

The Trade

LVS is a ticker I trade on a regular base. Over t past 5 years it was trading between  $35ish and $65ish.

After suspending the dividend in 2020 during Covid, it started to pay a dividend again. The yield is 1.78%. It is not much, but better then nothing.

Die 45ish line is a major support line. 

I bought 100 shares at $44.86. I sold next week Friday (May 31st) a 45 call for 48c. If I get called out the return on investment will be 14c+48c = 62c/$44.86 = 1.38%. If I don't get called out, the ROI will be 1.06%, 

Disclosure

I have been beneficially long the shares in LVS and short the call in LVS. 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.

CMA - Covered Call - New Trade

The Trade

CMA is a ticker that I found with a search tool.

It has a wide trade range in last 5 years between 30 and 100$. 

CMA has a dividend yield of 5.59%.

Over the last 6 months it was mainly stuck between 48ish and 56ish.

CMA is trading at a major support line.

I bought 100 shares at $50.58. I sold next week Fridays (May 31) 51 Call for 55 cents. If I get called out, then I have to sell my shares at $51. In this case, I get to keep the gain of 42c a share and the 55c from the short call. 42+55 = $0.97/50.58=1.91% ROI. If I don't get called out, I get to keep the shares and the 55c. 0.55/50.58=1.08% ROI.
Until then I am sitting on my hands.

Disclosure

I have been beneficially long the shares in CMA and short the call in CMA. 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.

Week 168 (till May 24, 2024)

 Added

I added last week $150 to MO and THW

Review

YTD $589.63 in dividends showed up in my account.

Plan for next week

I am adding $150 NVDA. NVDA is splitting on 6/7 10:1. NVDA does not pay a dividend, but I can have growth components in this portfolio as well.

Disclaimer

I have been beneficially long with stocks all the items I discuss in the dividend investing. 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.     

Week 163-167 (till May 17, 2024)

 

 Added

This seems to become a  habit, that I don't manage to invest what I am supposed to be investing in.

Review

YTD $583.78 in dividends showed up in my account.

Plan for next week

I am adding $150 to THW (for last week) and $150 into MO

Disclaimer

I have been beneficially long with stocks all the items I discuss in the dividend investing. 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.