Boeing Co (BA) Covered Calls

In my IRA my Boeing (BA) shares were called away a couple of days ago due to my covered call being ITM.  BA closed on Friday at 98.15.  From Friday’s close to now BA has dropped a little over a dollar.  I’m still bullish on the aerospace industry and jumped back in when BA hit 96.99.  I bought 100 shares and within five minutes sold an August 100 covered call (BAHT) and received $224.25 after commissions.  I received $259.25 after commissions for that June covered call which means by buying BA back under $97, I’m ahead of where I would have been if I had not sold the option.  I have to admit, luck has been on my side recently.  (I’ll stop calling it luck if I retire before I’m 45.  I know once I get cocky, I’ll lose big.)

My IRA has been lagging behind my taxable account in annualized returns this year.  Part of that is due to the fact that I can’t sell naked puts in my IRA and the larger part is due to not being able to use margin in my IRA.  That means that each month I have a few days, if not more than a week, that I’m sitting on cash not invested when options expiration comes rolling around.  I think that repeated period of lost growth each month is starting to hurt me.  My taxable account has the additional boost of margin that has given me double the normal returns since I’ve been staying close to 200% invested.  Of course I can’t forget that DNA put a hurting on my returns before I wised up and sold for a loss.  I just checked, DNA is down from where I sold it.  That’s always a good feeling.

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