Opening (IRA): NVO March 28th 76 Covered Call

10 févr.

... for a 74.50 debit.

Comments: Taking what amounts to a modest directional shot with a break even below the 52-week lows, selling the -75 delta call against shares to emulate the delta metrics of a 25 delta short put, but with the built-in defense of the short call.

Metrics:

Buying Power Effect/Break Even: 74.50
Max Profit: 1.50
ROC at Max: 2.01%
50% Max: .75
ROC at 50% Max: 1.00

Will generally look to take profit at 50% max and/or roll out the short call if my take profit isn't hit by expiry.

12 févr.

Note

There is a 3/31 dividend to be had here of approximately 1.10, so I'm going to attempt to grab it, and I have to be a shareholder of record on 3/31 in order to do that. Rolling the March 28th 76 down to the April 17th 75 (there are only five wides available in April) for a 1.10 credit (a credit that exceeds that amount of strike destruction, so that I'm not giving up the max profit of the setup). 73.40 break even with a max of 1.60 (excluding dividends).