I was always interested in options but never quite understood how they worked and was just too scared to lose money. I’ve been reading and following a number of investing blogs, mainly dividend invertors like myself and a majority of them write covered calls on their long positions. So after reviewing the process and getting a grasp of options trading I started out writing some covered calls on my positions and like other investors have been supplementing my stock purchases with the premiums collected.
There are a plethora of strategies when it comes to options, but I stick with CSP – cash secured puts. Meaning you have the funds available to cover the option if it gets exercised and for a stock you own 100 shares of you can do CC – covered calls. You own the stock and agree to sell at the strike price.
First we have the two existing contracts from the previous week and they finished above the strike price and will be assigned. This is a position I had assigned a couple of weeks ago and was ready for it be called away. I made $307 in total on $4100 invested for a 7.5% return, I’ll now have that $4100 returned into my available funds for future options trading.
I normally play it safe, but this week I gambled on BYND and it paid off. Here are this weeks trades:
- $26 C PARA 8/5/22 0.23 EXPIRED
- $7 C SOFI 8/5/22 $7 0.18 ASSIGNED
- $28 P BYND 8/5/22 1.35 CLOSED
- $29.50 P BYND 8/5/22 1.35 CLOSED
- $34.50 P BYND 8/5/22 .14 EXPIRED
- $31.5 P TQQQ 8/12/22 .55 OPEN
I opened the week with 2 CSP on BYND and closed them early on Friday as the stock price shot up with help from the apes over on r/wallstreetbets , I have no proof just my speculation. I then jumped back into BYND later in the day and allowed that contract to expire. I collected $284 in premiums and paid $3 to close the first two contracts for a total profit of $280.69 a 4.8% return in 5 days.
August has gotten off to a strong start with $374 in premiums. Hopefully I can keep the momentum going, check my progress here. Comments and feedback welcome.