Tues. August 30, 2022. How our fearless, intrepid investor made out recently and her plans yestertoday

Our fearless, intrepid investor was on holiday yesterday, so she did not post anything about her derivatives experience.

Writing just out-of-the-money covered calls on Novavax (NVAX) every Monday, expiry date on Friday of the same week,  she lost $US10,990.00 in her “fun” portfolio over the course of about one year.

Mistakes are practice shots if we learn something from them.

She decided to write (sell) covered calls sufficiently out-of-the-money to earn about 1% per month. Safe, decent and guaranteed with a significantly reduced possibility of being assigned!

She also decided to write (sell) covered calls on a security that she would like to own long-term. After discussing the issue with knowledgable investors, she decided that she likes Intuitive Surgical (ISRG) and she bought 300 shares for a total of $US73,119.00. ISRG will continue to generate premium income even when it declines in the short term. Intelligent investors ignore short-term fluctuations.

Indeed, ISRG dropped by an extent greater than the premium income – a short-term loss.  Morningstar quants and analysts both recommend ISRG as a buy over the long term.  So yes, she earned her one percent a month premium income while waiting for ISRG to rise in price.

What did she do yesterday when the market opened at 9:30 AM?

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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