Opening (IRA): SPY February 3rd 398 Covered Calls
... for a 376.09 debit/contract.
Comments: Mixing things up a little bit here and/or attempting to simplify my investment life going forward. Here, I'm targeting the 45 DTE short call strike paying around 1% of the strike price in credit; the Feb 3rd 398 short call is paying a little more than that -- 4.25 ($425).
The focus here will not so much be on my "principal" (i.e., the value of my stock position), but how much premium I can bring into my account over time on the short call side of things. Naturally, I will still keep track of my cost basis (376.09/share on fill), since you generally do not want to roll the short call to a strike that is less than your cost basis unless you absolutely have to.
I'll generally look to roll out the short call at 50% max to a similarly situated strike (i.e., 45 DTE paying 1% of the strike price in credit) or take profit on the whole setup if it converges on max (which would be 398.00).
Comments: Mixing things up a little bit here and/or attempting to simplify my investment life going forward. Here, I'm targeting the 45 DTE short call strike paying around 1% of the strike price in credit; the Feb 3rd 398 short call is paying a little more than that -- 4.25 ($425).
The focus here will not so much be on my "principal" (i.e., the value of my stock position), but how much premium I can bring into my account over time on the short call side of things. Naturally, I will still keep track of my cost basis (376.09/share on fill), since you generally do not want to roll the short call to a strike that is less than your cost basis unless you absolutely have to.
I'll generally look to roll out the short call at 50% max to a similarly situated strike (i.e., 45 DTE paying 1% of the strike price in credit) or take profit on the whole setup if it converges on max (which would be 398.00).
Trade active:
Just to say "I did something today": Rolling down the SPY Feb 3rd 398 to the Feb 3rd 395 for a 1.05 ($105) realized gain and a credit of .82. Cost basis of 375.27; total call side credits collected of 5.07; Feb 3rd 395 current value: 4.02.
Trade closed manually:
Profit ... staring me in the face. Out today for 378.22. 2.95 ($295) profit. (My enthusiasm for this didn't last long.)