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Covered Call Update #2 For D18

Dec. 16, 2020 9:58 PM ETBloom Energy Corporation (BE), EOLS, MVIS, RIOT, VERU
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  • One more winner from week 1.
  • So far the live test is three-for-four for a gain of 2.2% since December 7.  That's an annualized return of more than 69% (without compounding).
  • Yesterday and today we entered four new positions set to expire Dec 18.
  • One new position (EOLS) gave nearly 14% time premium for just three days until D18 expiration!  Crazy times.

We had one close out for a win and entered several new positions all expiring on D18.

The close out.

Our RIOT 8's closed out at $7.95 for a gain of 4.7%, biggest gain yet.  So far we are three for four for a net gain of 2.2% since Dec 7.   That is 53.2% annualized.

Yesterday's new positions.

Bought VERU at $9.87 and sold D18 $7.50 calls for $2.47 for a net debit of $7.40.  Max profit is 1.3% ($0.1/$7.4) in just three days if VERU stays above $7.50.  It's currently at $9.99.

Bought BE at $26.54 and sold D18 $23.00 calls for $3.80 for a net debit of $22.74.  Max profit is $1.14% ($0.26/$22.74) if BE stays above $23.  It's currently at $25.88.  

Today's new positions.

MVIS at $4.07 and sold the D18 $3.50 calls for $0.64.  Max profit would be 1.75% if MVIS stays above $3.50.  It's currently at $3.94.

And then another one that's exciting.  Our system generally tries to sell deep ITM calls, but the EOLS ATM call was giving nearly 14% time premium just three days before expiring on Friday.  So we entered EOLS at $4.01 and sold $4 calls for $0.5.  If EOLS stays above $3.5 by expiration, we get nearly 14% profit!  I haven't seen a setup like this in a long time. 

Interestingly, while EOLS closed at $3.67 today (gulp), it shot up to $5 in after hours before settling down to $4.  There was some news today about a lawsuit.  Covered call traders hate news.  Fingers crossed!

The link is here.

Covered calls

As always, happy trading!

Analyst's Disclosure: I am/we are long CVM, IPOC, CALA, TRIL, and all of the stocks in the linked spreadsheet.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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