September 19, 2022. How our fearless, intrepid investor made out recently and her plans for today

Writing just out-of-the-money covered calls on Novavax (NVAX) every Monday, expiry date on Friday of the same week,  our fearless, intrepid investor lost $US10,990.00 in her “fun” portfolio over the course of about one year. She bought 1,100 shares at $US300 a share for a total of $US330,000.00. Last Friday, September 16, NVAX closed at $US30.41! Her shares would have had a market value of$US9,123.00 ($US30.41 times 1,100) but she got out earlier plus she did earn something from the weekly premium income that she received reducing her losses to the $US10,990.00  mentioned above.

Mistakes are practice shots if we learn something from them. What did she learn from her NVAX experience?

Instead of writing just out-of-the-money covered calls on any security, she decided to write (sell) covered calls sufficiently out-of-the-money to earn about 1% per month. That would significantly reduce the possibility of being assigned!

She likes Intuitive Surgical (ISRG), so she bought 300 shares at $243.7592 per share for a total of $US73,127.76. ISRG will continue to generate premium income even when it declines in the short term.

Indeed, last Friday, ISRG dropped to $US206.28 per share giving them a value of $US61,884.00 for a total loss of $US11,243.76 ($US73,127.76 minus $US61,884.00).

Intelligent investors ignore short-term fluctuations. She likes ISRG and is happy to hold long-term.

What will she do when the NYSE opens at 9:30 AM today?

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Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me