| All rights reserved - Core Position Trading, LLC-2023 | |||||||||
 | NEW CCW TRADE | ||||||||
| NEW (OTM) COVERED CALL TRADE IS NOW | OPEN | ||||||||
| DAYS | THIS NEW CCW TRADE BEGINS AND ENDS | ||||||||
| 10 | October 17, 2023 | October 27, 2023 | |||||||
FAS |  | TIME AND DATE STAMP | |||||||
| Tuesday, October 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-FAS | |||||||||
| DETAILS FOR THIS COVERED CALL TRADE | |||||||||
| Today a NEW (OTM) Covered Call position was opened using ETF (ticker: FAS) | |||||||||
| Direxion Daily Financial Bull 3x Shares ETF , when the stock was trading for $62 a share I Sold (10) (OTM) Covered Call contract(s) using (1000) shares for the October-27-2023 expiration date, strike price of $67 receiving a premium of $0.6 or $600 in up front cash flow to begin this trade. These shares I'm using have were acquired via () and have a cost basis of $71.05 per share. | |||||||||
| > 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. | |||||||||
| COMMENTARY AS TO WHY I OPENED THIS TRADE | |||||||||
| WHY I OPENED this CCW on > FAS > I initiated this trade when the stock was trading at $62 per share. Now, my original cost basis for this position was $71.05, which means I had a bit of a paper loss at the time. However, I saw an opportunity to make the most of the situation by employing a covered call strategy. In this strategy, I decided to write an Out of the Money (OTM) call option with a strike price of $67. The expiration date I selected is October 27, 2023. By selling this call option, I received a premium of $0.60 per share, totaling $600 for the entire position. What makes this trade particularly interesting is the potential outcome. If the shares are called away, meaning the call option is exercised, I'll incur a loss on my shares. In other words, I would have to sell my shares at the strike price of $67, which is below my original cost basis of $71.05. This would result in a loss on the shares. In summary, this covered call trade involves a bit of a risk. While I received a premium of $600 by selling the call option, I might need to sell my shares at a price lower than my original cost. It's a strategy that can help offset some of the loss potential on the shares, but it's important to be aware of the risks and potential outcomes when employing such a strategy. It's a way to manage a position and potentially generate some income while understanding the trade-offs involved. written by JohnG , enhanced by ChatGPT | |||||||||
| THIS TRADE WAS PLACED INSIDE MY NON-TAXABLE IRA ACCOUNT | |||||||||
| NO EARNINGS DURING THIS TIMEFRAME | Verify-FAS | ||||||||
| NO EX-DIVIDEND DATE DURING THIS TIMEFRAME | |||||||||
| PROJECTED PREMIUM ONLY POTENTIAL (CCW PREM EXPIRE WORTHLESS) | |||||||||
| If the stock finishes below the strike price and my shares are not taken and no dividend was offered then this becomes a premium trade only and below is the projected PROFIT projections for this trade. | |||||||||
| Total Prem$ | Projected Cash Flow | ||||||||
| $600.00 | $600.00 | ||||||||
| Cash on Cash % | |||||||||
| 0.84% | |||||||||
| 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 | |||||||||
| WHAT IF MY SHARES ARE TAKEN | |||||||||
| What if my shares were expectedly taken on this trade prior to expiration or I didn't manage it correctly by ending the trade early if I didn't want my shares taken prior to the expire date? | |||||||||
| Cost Basis - per share | Shares taken | I would Profit or Loss this | |||||||
| $71.05 | $67.00 | -$4,050.00 | |||||||
| SHARES TAKEN - I WILL LOSE money as my stock purchase price is higher then this strike price | |||||||||
| 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. | |||||||||
| 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. | |||||||||
| 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 | |||||||||
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