Long

Opened (IRA): BITO June 28th 31 Covered Call

Updated

... for a 27.55 debit.

Comments: Not the weakness I was looking for, but setting myself up to grab the early June dividend.

Generally, I'll look to roll out the short call at 50% max ... .

Trade active

A capital preservation roll ... . With price below my break even, rolling the short call down and out to the July monthly 30 strike for a .45 credit. 27.10 cost basis.

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Probably didn't need to roll this, but rolled out to the Sept 20th 30 for a .70 credit. 26.40 break even.

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And the June divvy will be ... 1.767963/share; lot. 24.63 break even when it drops (record date 6/3; payable date 6/10).

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Rolled the Sept 20th 30 out to Dec 27 for a .74 credit. 25.66 cost basis (ex. divvy); 23.89 (inc. divvy). I'm perfectly fine with treating this as a dividend-harvesting play and not making much on the covered call itself if that's what it turns out to be.

Note

7/1 dividend: 1.50/share; lot. 22.39 break even (including divvies).

Trade active

Selling a Sept 20th 20 put (25 delta) for a 1.21 credit, converting my covered call into a covered strangle.

24.45 break even (excluding dividends); 21.18 (w/dividends).

You can use this approach to either (a) add to a position at lower share prices; (b) reduce your break even; or (c) finance short call strike improvement where you've been too aggressive with your short call rolls. I'm both fine with adding to my position at 20/share or just reducing my break even.

The short strangle aspect is kind of diagonalized here with the short call out in Dec; the short put in Sept, so I'll look to mostly leave the short call alone for now, roll the short put out at intervals until I get to Dec, and then roll the short strangle as a unit.

There are a couple of draw backs to this setup: (a) You do not get the short put "BP free"; and (b) you're increasing the position's long delta, which may result in greater intratrade drawdowns should the position move substantially against you.

Note

8/1 dividend: 1.45/share; lot. 19.73 break even (including dividends).

Trade active

Rolling the Sept 20th 20 short put out to Dec for a 2.36 credit and rolling the Dec 20th 27 short call down to the 22 for a .56 credit for a total of 2.92. 21.52 break even (ex. dividends); 16.81 (w/dividends). This "fixes" my net delta for what I want it to be for this type of setup (~100), lowers my break even substantially, and increases the likelihood that my shares are called away at 22.00/share.

I'm primarily in this underlying for its dividends, but it seems to suffer from a bit of rollover erosion, so want to keep my excluding-dividends break even at or near where the underlying is currently trading.

Note

Ex. divvy: 09/03/2024; Pay Date: 09/10/2024; 1.208837/share; 1.21/one lot.

15.60 break even (with dividends).

Note

10/1 divvy: 1.09/share. 14.51 break even (with/divvies).

Trade active

Rolling the Dec 20/22 short strangle aspect to the Jan 20/21 short strangle for a 1.20 credit. 20.32 break even (without divvies); 13.31 (with divvies).

Note

11/1 Dividend: .99/share; 12.32 break even (with divvies).

Trade closed manually

Getting out when the gettin's good ... . Closed the 21 covered call for a 20.63 credit and the short put for a 1.08 debit (19.55 total). 7.23 ($723) total profit (including dividends).

NaughtyPines

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