Until the beginning of last week (June 6, 2022), our fearless, intrepid investor averaged 14% annually in her “fun” portfolio writing 10 covered call contracts on Novavax (NVAX) on Mondays, expiry dates on Fridays of the same week. To lower the risk of being assigned, she wrote those $10 out of the money instead of the usual just out-of-the-money sale, as she did in the past. For details, go here.
Using the premium income she received plus some cash that she had in her “fun” portfolio, she bought another 1200 shares of NVAX. She now owned 2300 shares.
Until the beginning of last week….
Then what happened? The market went down the following day but our fearless investor’s “fun” portfolio rose $C4,913.76! Thank you, NVAX!
Well, the fastest way to make a buck can also be the fastest way to lose a buck! From here on, NVAX continued to decline and by the end of the week, our fearless investor’s “fun” stopped being fun. The worst that could happen did happen. The price of NVAX shares dropped below the premium income she received resulting in an overall total loss.
What will she do today when the market opens at 9:30 AM?YOU NEED TO LOGIN TO VIEW THE REST OF THE CONTENT OR LEAVE A COMMENT. Please Login. Not a Member? You can now sign up for $12 for a one-year membership. Join Us