I had no September options left in my account to expire today, but finally sold a covered call on some of my long shares. I have 200 shares of IWM in my account, but decided to only sell one covered call today. I’ve had such a mental block against making this trade for so long that I finally figured I could push past it by only covering half of my IWM shares. I was right in not selling covered calls since the spring while IWM was climbing, but after topping out last week, I opted to start the process of bringing in more premiums outside of TLT again.
While IWM was trading at $121.61, I sold one IWM November $123 covered call for $2.80 and received $279.33 after paying $0.67 in commission. My plan for the past few months was to sell covered calls on these shares closer to $125 and yet I didn’t pull the trigger when IWM broke above $125.00. By selling this single covered call at the $123 strike and bringing in $279.33, my exit price will be $125.79 if assigned.
If IWM runs above $125.79, I’ll have my uncovered 100 shares left to gain ground. Then again, I might go ahead and place a limit order next week for a $125 covered call in case IWM makes a quick jump higher by a dollar or two. I still need to cover my MDY and DIS shares too, but that’ll also have to be another day.