Below, you can see Novavax (NVAX) covered calls chart ending yesterday.
On November 2, 2020, we posted a blog describing one of the portfolios of one of our adventuresome members.
About three months previously, in short order, she lost $232,407.50 out of some $500,000 in that portfolio when she acquired NVAX shares at $174 per share. She got NVAX because the premiums on its derivatives were attractive.
She continued to write covered calls on NVAX every Monday, expiry date Friday of the same week. After 13 weeks (the last one ending last Friday, November 6), she trimmed her losses to $26,341.25.
On Friday, November 6, she was assigned and was fully in cash. This time she got into the market at 9:45 AM. Instead of buying 4,000 NVAX shares again, she only bought 3,500 because she felt that at over $100 a share, they were too expensive.
Also, because at 9:45 AM, it looked like NVAX was rising, she wrote covered calls with a strike price of $102 instead of her usual just out-of-the-money position.
She received a premium of $9,100 immediately with a possible additional amount of $10,000 ($3.00 times 3,500) if the stock reaches $102 by Friday, November 13.
Would she have been better off simply holding the 3,500 shares of NVAX instead of selling covered calls on them? We will know this coming Friday.
That is one of the reasons why the Monday Morning program recommends passive investing.
It takes very little time, a vital resource, and it outperforms over 95% of portfolios over a market cycle.
We have designed the Monday Morning Millionaire Program to offer abstracted investment education. Over the last two decades, the program has outperformed over 90% of portfolios, including professionally managed ones.
The program does not provide any investment advice or endorsements.
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