Assignment (IRA): QQQ September 16th 321 Covered Call... with a cost basis of 317.10/share.
Comments: A continuation post to track my cost basis in shares that I will find in my account on Monday due to the June 24th 321 short put expiring in the money. Knowing that this was the likely outcome, I went ahead prior to assignment and sold a short call vertical against and then rolled it out to the September expiry on strength with a resulting cost basis of 317.10. (See Post Below).
There are a couple of different approaches I can take at this point: (1) Sell call against, targeting the <16 delta strike in the expiry nearest 45 DTE paying around 1% in credit (or a similar, delta-based call) -- much as I do on the put side, staying in the stock and running that ad finitum; (2) Sell call against at my existing cost basis, looking to exit the shares at the earliest possible juncture either via call away or closing the setup out at or near max.
As a general rule, I opt for the latter, since my preference is to stay in options contracts due to their flexibility; one can't, after all, roll stock for strike improvement. Once you're in stock, you're basically married to it, and with QQQ in particular, it's not as though the market is "paying you to wait" -- the annualized yield is a paltry .74%.
As usual, we'll see how things go. Currently, I've got some work to do, since my cost basis is 317.10* relative to where the Q's finished on Friday at 294.61 with the September 321 having 6.22 ($622) of extrinsic left in it.
* -- In reality, my cost basis is better than this. I collected a total of 7.13 ($713) prior to assignment. (See Post Below). For cost basis reduction purposes, however, I'm treating the setup as though I bought the shares at 321 (the short put strike) and reduced their cost basis by the credits collected by the sale of the short call vertical against and then going from there.
