NEW UCPTD Trade Alert - TQQQ - Covered Call

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DISCLAIMER: This trade is based on this date. I'm not suggesting a move up or down. I'm showing my trade that I have already done. I'm not recommending this stock as a purchase/trade. Think of it like this, I'm 'Showing you the World thru my Eyes'.
NEW TRADE ALERT
Wednesday, March 4, 2020
Covered Call Trade opened using a Standard Covered Call Strategy
				3x ETF
NEW Covered Call position with TQQQ (TQQQ) this week
The trade idea and what is the expectation
MORE OF THE SAME - I bought 100 shares @ $83.50 ... not to bore you ... you know the deal here, playing the directional move and should TQQQ fall, I will buy back, write another ... with $9 or downside and the TQQQ's basically playing in the sandbox range of $77-$87 ... this will dance a bit ... if my shares are taken, MAX GAIN, we move on :) if not, we do what we do.
The Headline Krum!				Yahoo Prem
TRADE KRUM!	DAYS	Cash on Cash %	Annualized	N/A
$903.00	32	10.88%	124.14%
Max Profit Projections for this trade
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
TQQQ	TQQQ	100	$82.97	$8,297.00
EXPIRATION DATE	DAYS	STRIKE	OPTION	CoC % GAIN
Apr-3	32	$83.00	$9.00	10.88%
DIVIDEND	DIVIDEND GAIN	OPTION GAIN	STOCK GAIN	TOTAL KRUM
$0.00	$0.00	$900.00	$3.00	$903.00
All calculations above are based on collecting [ Stock move + CCW + DIV if offered]
No, they do not offer investors a dividend.
Did this trade meet the Golden Rules?
SP500 type	Earnings?	Dividend	Volume?	Open Interest?
3x ETF NASDAQ	No they do not	No they do not	Yes they do	No < 100
Read notes above > OI was 51 but this moves to quick OI isn't a problem
The finer details of this trade
Trade details - 1 contract(s), Strike Price $83 , Premium of $9, with a >Jun 19th< expiration date receiving a total credit of $900 per share
@ the time of this trade > 100 shares $82.97 .
The will be a 32 day trade
This In the Money (ITM) Covered Call trade has a potential Cash On Cash Return of :
Covered Call - if shares are taken I make $9.03 per share, or 10.88 %- Annualized 124.14%
Covered Call - if shares are not taken option expires worthless I make just $9 per share, or 10.85 %- Annualized 123.73%
Downside Protection summary (if this trade goes bad)
CURRENT STOCK PRICE	STRIKE PRICE	D/P PRICE	$ PROTECTION	% PROTECTION
$86.34	$83.00	$74.00	$12.34	14.29%
What's my breakeven price? (Stock Price - Prem - Div = Downside breakeven Price)				$73.97
What's the expected move in the stock?
Current Stock Price	Implied Volatility	Imp Vol (+)	Imp Vol (-)	DELTA
$82.97	91.10%	$120.76	$45.18	0.56
Delta = the expected % chance the stock gets to the Strike				56.00%
		$120.76
$82.97			With Implied Volatility being 0.4555% to reach $120.762835 in this 32 day period, with this Covered CallStrike Im hoping the stock moves just 0.455138423526576% of that 0.911% Implied Volatility
		$45.18
What is Implied Volatility? - Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy. - source: Zacks Investment Research
This Covered Call trade has 2 typical outcomes
CC - Outcome #1 - the stock moves above my strike price of $83 at expiration, I have my shares taken away and I make MAX gain for this trade 10.88% Cash on Cash investment for this 32 day trade
CC - Outcome #2 - the stock does not move above my strike price of $83 at expiration, I do not have my shares taken away and I make only the option premium of $9 per share for this 32 day trade. I keep my shares.
Further research with - Using charts for technical analysis, Div info and Earnings Report Date
RSI, SUPPORT LINES	KELTNAR, OBV		DIVIDEND	EARNINGS REPORT
View Chart-TQQQ	View Chart-TQQQ		Verify-TQQQ	Verify-TQQQ
			No	No
				- N/A- N/A
Always look at a companies chart ... it tells a story and that story could be UP or DOWN
How I could 'Manage' this trade should the stock rise or fall prior to expiration
I could manage this Covered Call - #1 - The stock moves and closes on expiration above my strike price. My shares will be given assigned to the Call Buyer, I will be given cash for my shares (strike price)
I could manage this Covered Call - #2 - The stock does not close at or above my strike by expiration, I will likely not have my shares taken from me. I keep my shares, I keep the Covered Call premium. Trade ends. Shares become available to trade.
I could manage this Covered Call - #3 - Regardless of where the stock moves during the Covered Call timeframe, a news event or Ex-Date prompts the Call buyer or market maker to take my shares before expiration. Most common situation, the stock has moved up and now trades near or above the strike price making it profitable to exercise the Call option early for the Call Buyer to collect the dividend.
Education Corner
Great Covered Call video posted at
Covered Call - Description - A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other securities. ... writing (i.e. selling) a call generates income in the form of the premium paid by the option buyer. Source - https://en.wikipedia.org/wiki/Covered_call
Disclaimer - Yes - at the time of this posting I do have a position in this equity. By posting this I am by no means recommending this equity and am not front running for its performance. I have risked my own money and am accountable for the trade results.
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