NEW UCPTD Trade Alert - JPM - Covered Call

All rights reserved - Core Position Trading, LLC - 2020
	NEW TRADE ALERT
Covered Call Trade opened using a Standard Covered Call Strategy
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 Covered Call position was opened on
JP Morgan Chase
TIME AND DATE STAMP | .		Wednesday, August 5, 2020
The trade idea and what is the expectation
Keeping it going with JPM! ... ANOTHER , not going to bore you with this one ... with JPM having past earnings and its EX-Date has past ... a nice 30 day Covered Call trade ... if shares are taken its been a VERY NICE run
The Headline Krum!
TRADE KRUM!	DAYS	Cash on Cash %	Annualized
$2,100.00	30	4.30%	52.31%
Just doing what I know to do best ... sell premium
Max Profit Projections for this trade
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
JP Morgan Chase	JPM	500	$97.69	$48,845.00
EXPIRATION DATE	DAYS	STRIKE	OPTION	CoC % GAIN
Sep-4	30	$99.00	$2.89	4.30%
DIVIDEND	DIVIDEND GAIN	OPTION GAIN	STOCK GAIN	TOTAL KRUM
$0.00	$0.00	$1,445.00	$655.00	$2,100.00
All calculations above are based on collecting [ Stock move + CCW + DIV if offered]
Yes, they offer investors a dividend but *NOT* during this trade timeframe
Did this trade meet the Golden Rules?
SP500 type	Earnings?	Dividend	Volume?	Open Interest?
Yes they are	No Earnings	Yes they do	Yes they do	Yes > 100
Notice > Earnings is Aug-4 so I probably avoid it but it is during this timeframe
The finer details of this trade
Trade details - 5 contract(s), Strike Price $99 , Premium of $2.89, with a >Sep 4< expiration date receiving a total credit of $1445 per share
Already had 500 shares for $97.69 , $48845 , total investment.
The will be a 30 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 $4.2 per share, or 4.29931415702733 %- Annualized 52.3083222438326%
Covered Call - if shares are taken I make $4.2 per share, or 4.29931415702733 %- Annualized 52.3083222438326%
Downside Protection summary (if this trade goes bad)
CURRENT STOCK PRICE	STRIKE PRICE	D/P PRICE	$ PROTECTION	% PROTECTION
$97.69	$99.00	$96.11	$1.58	1.62%
Breakeven price? (Stock Price - Prem - Div = Downside breakeven Price)				$94.80
What's the expected move in the stock?
Current Stock Price	Implied Volatility	Imp Vol (+)	Imp Vol (-)	DELTA
$97.69	33.80%	$114.20	$81.18	0.4613
Delta = the expected % chance the stock gets to the Strike				46.13%
		$114.20
$97.69			With Implied Volatility being 0.169% to reach $114.19961 in this 30 day period, with this Covered CallStrike Im hoping the stock moves just 0.155590234414986% of that 0.338% Implied Volatility
		$81.18
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 $96 at expiration, I have my shares taken away and I make MAX gain for this trade 5.48308410223776% Cash on Cash investment for this 30 day trade
CC - Outcome #2 - the stock does not move above my strike price of $96 at expiration, I do not have my shares taken away and I make only the option premium of $3.46 per share for this 30 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-JPM	View Chart-JPM		Verify-JPM	Verify-JPM
			Yes	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 - No - at the time of this posting I did not own the shares of this equity. and it probably means I've done a Cash Secured Put ... for which if this trade goes against me I *will* own these shares ... I risk my own money on this trade and am accountable for the trade results.
Remember, the content of this site is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Please read the full disclaimer posted below and visit cptdashboard.com for my privacy policy.
Image credits - stockcharts.com | barchart.com | foolcdn.com | yahoo.com | earningswhispers.com
© 2020 Core Position Trading, LLC and the CPT Dashboard - All Rights Reserved				Disclaimer
This area below is used ONLY IF I purchased a Protective Put as a part of this trade. The combination of the Covered Call Write CREDIT and the Protective Put purchase DEBIT are calculated as one trade.
Covered Call with a Protective Married Put (Collar)
Price @ trade	CCW Strike	CCW Prem	Put Strike	Put Cost
N/A	N/A	N/A
Option Profit/Cost/Total		#VALUE!		$0.00
Cost Bearkdown for this insurance:		$0.00	reducing my profit	#VALUE!
Yes - I have purchased a protective put for this trade (details below)
STRIKE	N/A
STOCK PURCHASE $			True downside protection for the CCW is	I tried to buy the Proective Put @ the downside protection price (not totally perfect)
PROTECTIVE PUT			$94.80
		Losing $ on stock purchase	Making money on the Protective Put
What is a Protective Put - A protective put is a risk-management strategy using options contracts that investors employ to guard against the loss of owning a stock or asset. The hedging strategy involves an investor buying a put option for a fee, called a premium.
What is the Covered Call with a Married Put - A stock owner will SELL or Write a Covered Call and then BUY a Put options for downside protection.
© 2020 Core Position Trading, LLC and the CPT Dashboard - All Rights Reserved				Disclaimer