Holding 1,200 shares of Novavax (NVAX) in her “fun” portfolio, on Monday, November 8, our fearless, intrepid investor sold 12 contracts of NVAX covered calls, Strike Price $175, expiry date, Nov. 12. (C 12NOV21 175.00)
She received immediate premium income of $4.1583 per share which resulted in $4,989.96 total income (1,200 times $4.1583) while allowing $5.00 per share, or $6,000 for growth (1,200 times $5.00)
As it happened, NVAX rose above her strike price of $175 and she made $10,989.96 this past week ($4,989.96 plus $6000) in her “fun” portfolio – a fraction of her overall stock market investments.
She rarely netted that much when she was in full-time dental practice before retirement.
Selecting NVAX, the underlying security, the strike price and the expiry date for her covered calls sales was a deliberate action.
The outcome was entirely due to luck.
Monday Morning Program members don’t count on luck for results in their core portfolios. What our fearless, intrepid investor did last week, was, as we stated, entirely due to luck.
In the week ending on Friday, October 22, she lost $36,528.00 using a similar approach, namely:
- Underlying security – NVAX
- Date of covered-call sale – Monday of that week
- Expiry date – Friday of that week
- Strike price – sufficiently out-of-the-money to allow for $10 of growth
And her plans when the market opens today 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