The previous week, ending on Friday, October 22, our fearless, intrepid investor lost serious money selling 12 covered call contracts on Monday of that week (October 18) at a strike price of $170.00.
That week, Novavax (NVAX) dropped to $134.56, giving her a $30.44 per share loss. Total loss?
$36,528.00!! ($30.44 times 1,200)
In a recent post, we stated is that mistakes are practice shots. To succeed, make more mistakes. Forget the mistakes; remember the lessons.
On Monday, October 25, she sold 12 NVAX contracts, strike price $137.00, expiry date Friday, October 29 (C 29OCT21 137.00). Her order was instantly filled. She received $3.6292 per share premium income for a total of $4,355.04 (1,200 times $3.6292). The $137.00 strike price was sufficiently out-of-the-money to allow for an additional $5.00 per share of growth, if it took place.
With the habits of the Monday Morning program, luck hardly matters.
That week, she was lucky; NVAX rose above her $137.00 strike price to 148.43. In addition to the immediate premium income of $4,355.04, she got her $5.00 per share from NVAX growth, namely $6,000 ($5.00 times 1,200) for a total gain of $10,355.04. ($6,000.00 plus $4,355.04) Of course, she was assigned.
She positioned her “fun” portfolio for that outcome before breakfast on Monday, October 25. She rarely netted that kind of income in one week when she was in dental practice.
And her plans when the market opens today at 9:30 AM?
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