Our September 28 post talked about the difficulty of generating income in today’s low-interest environment. We stated that some of our members and subscribers are generating income by selling puts and calls. Some of our members are doing exactly that with Novavax (NVAX).
This is an update describing what is (likely) possible, selling NVAX derivatives today when the market opens at 9:30 AM Eastern Time today.
Based on the October 2 (last Friday) closing just out-of-the-money covered calls (NVAX C 09OCT20 104.00 US) or just in-the-money cash-secured puts (NVAX P 09OCT20 103.00 US) premium bid/ask spread, we estimate that investors could (likely) earn $600 per $10,400.00 safely (about $60,000 per million) when the market opens .
Again, investors can bank the income received.
Note that the Monday Morning Program recommends passive investing — watching grass grow, watching paint dry. Selling puts and calls is NOT passive investing. However, our members with a moderate risk tolerance level have been doing it, often safely and successfully.
What is the worst that can happen from now until expiration date?