Sold Covered Calls on VIP Shares

Since I bought my covered calls back on VIP on Friday, I wanted to cover them with new calls today as soon as I saw VIP wasn’t heading up again yet. I bought my calls back with the hopes that VIP would rally soon. Since I can’t take hope to the bank, I took some risk out of my position and covered early this morning. While VIP was trading at 30.03 I sold two VIP August 30 calls (VIQHF) and received $438.50 after commissions.

Eventually I expect to take a loss on my shares, but for now I’m going to continue to milk the options for everything I can. Since I can’t change the fact that VIP has fallen as much as it has since I sold my naked puts that were assigned I have to deal with what I have. There’s really no benefit in worrying about where the stock has been. Selling the covered calls could give me a 7.3% return in two months. That’s a 41% annualized profit if VIP stays flat for the next two months. Of course it won’t stay flat, but I’ll be happy to see it bounce around $28-$32+ until I can get out. If I can get out by selling at $30, I’ll have a $858.78 profit on the whole series. That’s a 12% return from 2/19 to 8/15. If VIP keeps falling, I’ll be selling my next round of covered calls at the 25 strike in August and will be trying to break even. As always, if I can break even on my bad stock picks I’m happy since the good stock picks can keep carrying me.

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