1) PURCHASED 100 SHARES @ $17.95/ea. (debit $1,795 total).
2) SOLD a covered CALL @ $14 Strike, 8/26 EXPY, for $4.55 (credit $455).
3) AVG COST = $1,340 ($1,795 - $455). If I get assigned on my short call, then I sell the shares for $1400 + $455 premium = $1,855. $1,855 - $1,795 = +$60. Yippee.
4) Now I will receive the
APE dividend.
5) HOPEFULLY the ITM call I sold ($14) was 'DEEP' enough. $10 Strike MAY have been a more conservative choice. Time will tell! I may be selling short calls for months and months until I recoup. But hopefully not!
6) Lastly, if this does shoot up today (8/19), I have made my peace with that. Serenity now! <--which is already has. -__-
2) SOLD a covered CALL @ $14 Strike, 8/26 EXPY, for $4.55 (credit $455).
3) AVG COST = $1,340 ($1,795 - $455). If I get assigned on my short call, then I sell the shares for $1400 + $455 premium = $1,855. $1,855 - $1,795 = +$60. Yippee.
4) Now I will receive the
APE dividend. 5) HOPEFULLY the ITM call I sold ($14) was 'DEEP' enough. $10 Strike MAY have been a more conservative choice. Time will tell! I may be selling short calls for months and months until I recoup. But hopefully not!
6) Lastly, if this does shoot up today (8/19), I have made my peace with that. Serenity now! <--which is already has. -__-
Note
Scenario #1, OKAY: AMC stays above $14. I sell my shares, keep APE, and walk away $60 ahead.Scenario #2, IDEAL: AMC closes @ $13.40 - $13.99 on 8/26. In a perfect world, AMC will fall to around $13.75 per share on 8/26 and the call I sold will expire worthless. In this best-case-scenario, I will keep my shares, keep the
APE "dividend", and still be above my $1,340 avg cost or break-even price. I will continue to sell aggressive weekly calls.Scenario #3, WORST: AMC share price falls under $13. I mean, anything above $12 would be fine. But the worst case scenario is it falling around $10 or less. I'll be more work and time to get to a breakeven. I'm pretty bad at letting shares go at a loss (which I need to come to terms with).
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.