In November 2021, our fearless, intrepid investor earned $14,069.23 writing (selling) covered calls on NVAX each Monday, expiry date on Friday of the same week, far enough out-of-the-money to allow between $7.50 to $10.00 for growth. Her NVAX covered call earnings include a loss of $7,910.69 in the week ending on Friday, November 5.
Her winnings are entirely due to luck. Good luck.
Her luck in the first week of December was not so good.
As usual, she wrote covered calls on NVAX on the last Monday of November (the 29th) expiry date on Friday of the first week in December (the 3rd). Her 1,000 shares having been assigned, she bought them back at $222.50 for a total of $222,500.00.
She then sold 10 covered call contracts, strike price $235.00 allowing $15,00 for NVAX growth. She received $8,136.00 immediate premium income.
Isn’t that great?
Well, no growth took place – quite the opposite. On Friday, December 3, NVAX closed at $160.48, giving her a loss of $62.02 per share for a total loss of $62,000.00 that week.
Not so great!
What are her plans when the market opens today at 9:30 AM? What choices is she looking at?
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