I waited on re-selling the NYX covered call that expired on Friday. Not only did I miss the opportunity to sell it on Friday when the contracts were already available and my old covered call was going to finish well OTM. I even waited this morning when pre-market told me it was going down. One of the ways we small investors can beat the indexes is moving quickly. I had my chance in the first 15 minutes of trading to sell the NYX call $0.50 higher. Being greedy – I debated selling the 90 and 95 strikes for June and watched the price drop every couple of minutes until I knew I had to go with the 90. Then I didn’t take the current ask, just trying to squeak out a few extra dollars. While NYX was trading for 89.30, I finally went directly in for the ask and received $499.25 after commissions for my NYXFR (June 90) sale. I’m laughing that I went for more than that when I’m still hoping for a return of 33.54% if the price stays where it is and 36.23% if the call is exercised. AND that’s just based on nothing on margin. Going with my model of keeping only 50% of the cash needed to cover the position in reserves, I’ll be looking at nearly 70% return annualized. Had I not been greedy, I’d have even more.
On the other hand I was greedy with AAPL and it’s paying off for me. I bought back my AAPL call on Friday afternoon and it opened this morning up and kept climbing. I debated the 90 and 95 strikes for June and decided I was still bullish on AAPL and didn’t want to sell ITM. While AAPL was trading at $92.42, I sold QAAFS (June 95) and received $349.25 after commissions. I’m aiming for a 45% return if everything stays where it is now or a 75% return if it’s exercised.
If all stays the same for the next 60 days, I’ll pocket ~$850 in passive income from the past 30 minutes of work. The wait is on…
If I had to buy the underlying stock of from my May MA put and my four covered calls don’t get called away, I’d have to have an account value of $43,750 to cover it all without margin. My account value is $44,250 right now, so I have another $44,750 in underlying stocks I need to write puts on to truly use my model as I plan to. If each trade is worth $9k in underlying value, that’s about 5 trades I need to make. I actually need to try to sell another contract for May so I’m not so lopsided in how much expires each month.