NEW UCPTD Trade Alert - UPRO - 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
Tuesday, April 14, 2020
Covered Call Trade opened using a Standard Covered Call Strategy
				3x ETF
NEW Covered Call position with UPRO (UPRO) this week
The trade idea and what is the expectation
USING THE INDEX's for a leveraged directional play PLUS collecting PREMIUM along the way... I did 500 shares, not going to over reach although trust me, I could have done more ... but with my TQQQ and UDOW trades still active I DO NOT want to get OVER EXTENDED with leveraged 3x ETF's ... understand, THE ONLY REASON I use these 3 (tqqq,udow,upro) is because they are the 3 main index's and I'm playing a move in the overall markets. I DO NOT advise anyone to use leveraged investments IF you do not have your SKILLS in place ... now, if you do, then using an ETF like UPRO allows for some good premium while playing an index of 500 stocks. Youtube Search = Leveraged ETF and how they work prior to risky ANY of your money :)
The Headline Krum!				Yahoo Prem
TRADE KRUM!	DAYS	Cash on Cash %	Annualized	N/A
$2,475.00	31	14.16%	166.76%
Max Profit Projections for this trade
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
UPRO	UPRO	500	$34.95	$17,475.00
EXPIRATION DATE	DAYS	STRIKE	OPTION	CoC % GAIN
May-15	31	$36.00	$3.90	14.16%
DIVIDEND	DIVIDEND GAIN	OPTION GAIN	STOCK GAIN	TOTAL KRUM
$0.00	$0.00	$1,950.00	$525.00	$2,475.00
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?
Yes they do	No they do not	Yes they do	Yes they do	No < 100
Notice > OI being 41 ... I figure this isn't an issue because UPRO has such good over all volume I could get in and out of this trade if I had too without much issue.
The finer details of this trade
Trade details - 5 contract(s), Strike Price $36 , Premium of $3.9, with a >May 15< expiration date receiving a total credit of $1950 per share
I Purchased 500 shares for $34.95 on 43935 , $17475 , total investment.
The will be a 31 day trade
This Out the Money (OTM) Covered Call trade has a potential Cash On Cash Return of :
Covered Call - if shares are taken I make $4.95 per share, or 14.1630901287554 %- Annualized 166.758964419216%
Covered Call - if shares are not taken option expires worthless I make just $3.9 per share, or 11.1587982832618 %- Annualized 131.385850754534%
Downside Protection summary (if this trade goes bad)
CURRENT STOCK PRICE	STRIKE PRICE	D/P PRICE	$ PROTECTION	% PROTECTION
$35.91	$36.00	$32.10	$3.81	10.61%
What's my break even price? (Stock Price - Prem - Div = Downside break even Price)				$31.05
What's the expected move in the stock?
Current Stock Price	Implied Volatility	Imp Vol (+)	Imp Vol (-)	DELTA
$34.95	96.78%	$51.86	$18.04	0.54
Delta = the expected % chance the stock gets to the Strike				54.00%
		$51.86
$34.95			With Implied Volatility being 0.4839% to reach $51.862305 in this 31 day period, with this Covered CallStrike Im hoping the stock moves just 0.453857081545065% of that 0.9678% Implied Volatility
		$18.04
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 $105 at expiration, I have my shares taken away and I make MAX gain for this trade 18.4782608695652% Cash on Cash investment for this 51 day trade
CC - Outcome #2 - the stock does not move above my strike price of $105 at expiration, I do not have my shares taken away and I make only the option premium of $4 per share for this 51 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-UPRO	View Chart-UPRO		Verify-UPRO	Verify-UPRO
			No	Yes
				Apr-22th
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 time frame, 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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