Opening (IRA): TLT February 21st 87 Covered Call
... for a 85.97 debit.
Comments: Going long at or near November lows, selling the -75 call against shares to emulate the delta metrics of a 25 delta short put, with the built-in defense of the short call. I'm also looking to snag the January and potentially the February dividends here. This is a bit longer-dated than I ordinarily like to go, but I'm not doing a ton here besides waiting for January setups to come in/be managed.
The obvious variant is to sell the standard -30 delta against: TLT Feb 21st 94 covered call, 89.72 debit, 4.28 max. 4.77% ROC at max where the short call is paying >1% of the strike price in credit.
Metrics:
Buying Power Effect/Break Even: 85.97/share
Max Profit (ex. dividends): 1.03
ROC at Max: 1.20%
50% Max: .52
ROC at 50% Max: .60%
Will generally look to take profit at 50% max after at least the January dividend drops.
Comments: Going long at or near November lows, selling the -75 call against shares to emulate the delta metrics of a 25 delta short put, with the built-in defense of the short call. I'm also looking to snag the January and potentially the February dividends here. This is a bit longer-dated than I ordinarily like to go, but I'm not doing a ton here besides waiting for January setups to come in/be managed.
The obvious variant is to sell the standard -30 delta against: TLT Feb 21st 94 covered call, 89.72 debit, 4.28 max. 4.77% ROC at max where the short call is paying >1% of the strike price in credit.
Metrics:
Buying Power Effect/Break Even: 85.97/share
Max Profit (ex. dividends): 1.03
ROC at Max: 1.20%
50% Max: .52
ROC at 50% Max: .60%
Will generally look to take profit at 50% max after at least the January dividend drops.
Note
12/18 dividend: .351/share. 85.62 break even. Alas, I was not a shareholder of record for my March 21st 84 covered call.Note
Rolling the 87 short call out on near side test to the March 87 for a .55 credit. 85.97 break even (ex. dividends); 85.07 (including dividends).
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