... for a 416.52 debit.
Comments: A slightly different approach for the IRA -- a monied covered call paying around 1% of the debit paid at max.
Metrics:
Max Loss/Buying Power Effect: 416.52
Max Profit: 4.48 (1.08% at max/8.05% annualized)
Break Even: 416.52
Delta/Theta: 18.05/11.21
Variations:
Shorter Duration/Similar ROC:
SPY Sept 1st 443 Covered Call
Max Loss/Buying Power Effect: 438.42
Max Profit: 4.68 (1.07% at max; 7.80% annualized)
Break Even: 438.42
Delta/Theta: 27.8/12.0
Same Duration/Higher ROC:
SPY September 15th 445 Covered Call
Max Loss/Buying Power Effect: 438.44
Max Profit: 6.56 (1.50% at max; 11.17% annualized)
Break Even: 438.44
Delta/Theta: 32.6/10.6
Here, I'll be looking to take it off at or near max. The max is 421.00, so I'll be looking to take it off at .20 or so short of that or 420.80 or so, rather than waiting for the shares to be called away. Conversely, if price finishes below the 421 strike, I'll look to roll out the short call to reduce cost basis over time.
There are some advantages to doing things this way in a cash secured environment over selling a put with a similar break even, which would be the September 15th 418, paying a comparatively paltry 1.25 credit (so your max would be $125) with a 416.75 break even. In order to get a similar max profit metric to the monied covered call writing a put, I would have to sell something like the 34 delta 450 strike, paying 4.58 at the mid, but it would have a much higher break even at 445.44 (and a resulting higher buying power effect).
This only makes sense in this environment, however; on margin, the more buying power efficient avenue would be the short put.
Comments: A slightly different approach for the IRA -- a monied covered call paying around 1% of the debit paid at max.
Metrics:
Max Loss/Buying Power Effect: 416.52
Max Profit: 4.48 (1.08% at max/8.05% annualized)
Break Even: 416.52
Delta/Theta: 18.05/11.21
Variations:
Shorter Duration/Similar ROC:
SPY Sept 1st 443 Covered Call
Max Loss/Buying Power Effect: 438.42
Max Profit: 4.68 (1.07% at max; 7.80% annualized)
Break Even: 438.42
Delta/Theta: 27.8/12.0
Same Duration/Higher ROC:
SPY September 15th 445 Covered Call
Max Loss/Buying Power Effect: 438.44
Max Profit: 6.56 (1.50% at max; 11.17% annualized)
Break Even: 438.44
Delta/Theta: 32.6/10.6
Here, I'll be looking to take it off at or near max. The max is 421.00, so I'll be looking to take it off at .20 or so short of that or 420.80 or so, rather than waiting for the shares to be called away. Conversely, if price finishes below the 421 strike, I'll look to roll out the short call to reduce cost basis over time.
There are some advantages to doing things this way in a cash secured environment over selling a put with a similar break even, which would be the September 15th 418, paying a comparatively paltry 1.25 credit (so your max would be $125) with a 416.75 break even. In order to get a similar max profit metric to the monied covered call writing a put, I would have to sell something like the 34 delta 450 strike, paying 4.58 at the mid, but it would have a much higher break even at 445.44 (and a resulting higher buying power effect).
This only makes sense in this environment, however; on margin, the more buying power efficient avenue would be the short put.
Trade wurde manuell geschlossen
Taking some risk (and some long delta) off here ... . Closing for a 418.31 credit. 1.79 ($179) profit.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.
Haftungsausschluss
Die Informationen und Veröffentlichungen sind nicht als Finanz-, Anlage-, Handels- oder andere Arten von Ratschlägen oder Empfehlungen gedacht, die von TradingView bereitgestellt oder gebilligt werden, und stellen diese nicht dar. Lesen Sie mehr in den Nutzungsbedingungen.