| Current Stock Price | Implied Volatility | Imp Vol (+) | Imp Vol (-) | DELTA |
| $161.94 | 21.22% | $179.12 | $144.76 | 0.54 |
| | $179.12 | | |
| $161.94 |  | With Implied Volatility being 0.1061% to reach $179.121834 in this 32 day period, with this Covered Call Strike I'm hoping the stock moves just 0.118079745584785% of that 0.2122% Implied Volatility | |
| | $144.76 | | |
| 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 |
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| Important Trade Details |
| Trade details - 2 contract(s), Strike Price $160 , Premium of $4.4, with a 43903 expiration date receiving a total credit of $880. per share |
| Already had 200 shares for $161.94 , $32388 , total investment. |
| 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 w/ Dividend Capture shares ARE taken, hold shares thru ex-date I make $3.93000000000001 per share, or 2.43 %- Annualized 27.68% |
| Covered Call w/ Dividend Capture shares ARE taken PRIOR to Ex-Date (-DIV) I make $2.46000000000001 per share, or 1.52 %- Annualized 27.68% |
| Covered Call w/ Dividend Capture shares are NOT taken, hold shares thru ex-date I make $5.87 per share, or 3.62 %- Annualized 41.35% |
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| Dividend during this 32 day period? Yes EX-Dividend date is Feb-13th, $1.47 |
| Earnings Report during this 32 day period? No Earnings Report is (~) date of - N/A- N/A |
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| Did this trade meet the Golden Rules? |
| SP500 type | Earnings? | Dividend | Volume? | Open Interest? |
 | | | | |
| Yes they are | No they do not | Yes they do | Yes they do | Yes > 100 |
| Read notes above, see CCA CCW+DIV Capture calc below - trade meets 10 of the 11 CCA criteria |
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| This Covered Call trade has 2 typical outcomes |
| CSP - Outcome #1 - the stock does not close at or below the strike price. If this Cash Secured Put option trades above the strike price the CSP buyer will not give me the shares then what they can sell them for on the open market. I keep the premium and am not assigned the shares. Trade expires worthless |
| CC - Outcome #2 - the stock does not move above my strike price of $160 at expiration, I do not have my shares taken away and I make only the option premium of $4.4 per share for this 32 day trade. I keep my shares. |
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| Further research with - Using charts for technical analysis, Dividend information and Earnings Report Date |
| RSI, SUPPORT LINES | KELTNAR, OBV | | DIVIDEND | EARNINGS REPORT |
| View Chart-MMM | View Chart-MMM | | Verify-MMM | Verify-MMM |
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| Yes | No |
| $1.47 | - N/A- N/A |
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| Always look at a companies chart ... it tells a story and that story could be UP or DOWN |
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| 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. |
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| 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 |
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| 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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| 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. |
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