| All rights reserved - Core Position Trading, LLC-2023 | |||||||||
 | NEW PMCC TRADE | ||||||||
| STANDARD POOR MAN'S COVERED CALL TRADE IS NOW | OPEN | ||||||||
| FIRST TRADE USING THIS LEAP CALL OPTION | |||||||||
| A Poor Man's Covered Call (PMCC) is a long call diagonal debit spread that is used to replicate a covered call position. An investor will purchase a LEAPS Call Option In lieu of purchasing the shares, using the LEAP Call Option as protection, then Writing near-term Cover Calls (CCW) | |||||||||
| DAYS | THIS NEW CCW TRADE BEGINS AND ENDS | ||||||||
| 39 | July 17, 2023 | August 25, 2023 | |||||||
CVX |  | TIME AND DATE STAMP | |||||||
| Monday, July 17, 2023 | |||||||||
| 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'. | |||||||||
| View Chart-CVX | |||||||||
| DETAILS FOR THIS COVERED CALL TRADE | |||||||||
| Today a NEW Covered Call position was opened using Chevron Corporation (ticker: CVX) when the stock was trading for $153.85 a share. I Sold (10) Covered Call contract(s) using (1000) shares for the Aug-25-2023 Expiration Date, $155.00 Strike Price receiving a Premium of $4.2 or $4200 in upfront cash flow to begin this trade. This would an (OTM) Covered Call trade. | |||||||||
| PREMIUM ONLY TRADE | |||||||||
| PMCC trades are typically all premium trades . If the stock moves above my strike, in this case my LEAPS will be profitable too. | |||||||||
| Stock Price - placed | Date | Total Prem$ | Contracts | ||||||
| $153.85 | Jul-17 | $4.20 | 10 | ||||||
| Strike Price | Expire | Days | Projected Cash Flow | ||||||
| $155.00 | Aug-25 | 39 | $4,200.00 | ||||||
| WHY I OPENED this CCW on CVX > Chevron (CVX) is trading near the bottom of its recent (range being in my option $152.x - $157.x) trading range and I believe it can move higher I went ahead and bought 10 LEAPS call options to then write 10 near term covered calls ... basically we're using the poor man's covered call so we could use less capital for a covered call on Chevron | |||||||||
| > as with every trade, I will manage this trade as it approaches expiration ... buying back the option if it adheres to my -50% and 0.10 cent guidelines. -50% guideline being, such this option price fall 50% or more in the first 2 weeks I will buy back and look to roll the option - if the this option falls to 0.10 or less (in most cases) I will buy back the option and roll it for another credit if it presents itself. | |||||||||
| THIS TRADE WAS PLACED INSIDE MY NON-TAXABLE IRA ACCOUNT | |||||||||
| YES, EARNINGS WILL BE DURING THIS TIMEFRAME | Verify-CVX | ||||||||
| YES, THE EX-DIVIDEND DATE IS DURING THIS TIMEFRAME | |||||||||
| WHATS THE CASH ON CASH PERCENTAGE GAIN | |||||||||
| Stock Price - placed | Strike Price | Total Prem$ | Contracts | ||||||
| $153.85 | $155.00 | $4.20 | 10 | ||||||
| Premium Only? | CoC% | Share Taken? | CLOSE ENOUGH TO 3% | ||||||
| $4,200.00 | 2.73% | PROFIT | |||||||
| PROJECTED LEAPS + PREMIUM PROFIT POTENIAL | |||||||||
| If the stock finishes above the strike price and my shares are taken below is the projected PROFIT projections for this trade. | |||||||||
| ~ LEAPS Sale | Premium | Projected Cash Flow | |||||||
| $1,108.61 | $4,200.00 | $5,308.61 | |||||||
LEAP moves based on its DELTA | Cash on Cash % | ||||||||
| 9.77% | |||||||||
| PROJECTED PREMIUM PROFIT POTENIAL ONLY | |||||||||
| If the stock finishes below the strike price and my shares are not taken below is the projected PROFIT projections for this trade. | |||||||||
| Premium | Projected Cash Flow | ||||||||
| $4,200.00 | $4,200.00 | ||||||||
| Cash on Cash % | |||||||||
| 7.73% | |||||||||
| General plan for my Covered Call Write Cash on Cash % investments > I like to generate a 3% Cash on Cash return on my money invested ... depending on the timeframe ... 1 week, 1% is ok but if 30 days I want more like 3 to 4% preferred | |||||||||
| DETAILS LEAP CALL OPTION | |||||||||
| SYMBOL | LEAP | STRIKE | PAID | ||||||
| CVX | Jan2024 | $100.00 | $54.53 | ||||||
| CONTRACTS | CONTROLLING | DELTA | INVESTED | ||||||
| 10 | 1000 | .972 | -$54,530.00 | ||||||
| Believing that Chevron (CVX) is trading near the bottom of its recent trading range and I believe it can move higher I went ahead and bought 10 LEAPS call options to then write 10 near term covered calls ... basically we're using the poor man's covered call so we could use less capital for a covered call on Chevron | |||||||||
| Trading stocks and options have risk. Required reading prior to placing money at risk with options is the ODD which is posted below. "The Characteristics & Risks of Standardized Options" Prior to buying or selling an option, investors must read a copy of the Characteristics & Risks of Standardized Options, also known as the options disclosure document (ODD). It explains the characteristics and risks of exchange traded options. | |||||||||
| 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. | |||||||||
| Disclaimer - No - at the time of this posting I did not own the shares of this equity ... I risk my own money on this trade and am accountable for the trade results | |||||||||
| Feel free to email me if you have questions and/or concerns about this post - corepositiontrading@gmail.com - I usually will get back with you in 48 hours or sooner | |||||||||
| © 2023 Core Position Trading, LLC and the CPT Dashboard - All Rights Reserved | Disclaimer | ||||||||
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