Opening (IRA): TQQQ April 19th 53 Monied Covered Call
... for a 50.93 debit.
Comments: Selling the -75 delta strike against a one lot to emulate a 25 delta short put with built-in defense via the short call.
The call IV skew that I was looking to take advantage of before has evaporated somewhat, with the same strike short put paying about the same (1.94) as the max profit potential of this setup. Since I'm doing this in a cash secured environment, I don't get much BP relief over doing the monied versus the short put, so am really doing this setup for its "built-in defense" that I don't have to add in later, as I would should I want to defend a short put.
Will generally look to take profit on the entire setup at 50% max, look to roll out the short call at 50% max, and add at intervals, assuming I can get in at lower risk strikes.
Metrics:
Cost Basis/BPE/Break Even: 50.93
Max Profit: 2.07
ROC at Max: 4.06%
ROC at 50% Max: 2.03%
Comments: Selling the -75 delta strike against a one lot to emulate a 25 delta short put with built-in defense via the short call.
The call IV skew that I was looking to take advantage of before has evaporated somewhat, with the same strike short put paying about the same (1.94) as the max profit potential of this setup. Since I'm doing this in a cash secured environment, I don't get much BP relief over doing the monied versus the short put, so am really doing this setup for its "built-in defense" that I don't have to add in later, as I would should I want to defend a short put.
Will generally look to take profit on the entire setup at 50% max, look to roll out the short call at 50% max, and add at intervals, assuming I can get in at lower risk strikes.
Metrics:
Cost Basis/BPE/Break Even: 50.93
Max Profit: 2.07
ROC at Max: 4.06%
ROC at 50% Max: 2.03%
Trade closed: target reached:
Hit 50% max today, closing for a 51.97 credit. 1.04 ($104) profit; 2.04% ROC.
