Position management is the 3rd required skill for our covered call writing and put-selling success. On 7/19/2019, Larry shared with me a series of trades he executed with Veeva Systems Inc. (NYSE: VEEV). He astutely “hit a double” and was now looking to roll the option to the following month.
Larry’s trades and inquiry (in Larry’s words)
- I bought VEEV @ 165.99 on 6/17 and STO 165C 7/19 @ 7.10
- On 6/26 with VEEV @ 157.68, I BTC @ 3.30 for 3.80 profit on call. ( I know, I know, I violated your 20% rule).
- On 7/1, I resold option (165C 7/19) @ 4.01 Cr. (VEEV @ 163.78). Caught the bounce here.
- Friday, expiration Friday, VEEV trades @ 172.06 with mixed technicals (20/100 EMAs positive, MACD negative). STC 165C 7/19 looks like 6.70/7.30 (I normally limit order at mid bid/ask with Schwab and get it most of time).
- I was looking at either rollout or rollout/up to 8/16 (eps due 8/24) to either 165C @ 9.75 or 170C @ 6.65. The technicals suggest staying ITM.
- What’s your inclination on this one?
The “What Now” tab of the Ellman Calculator: Information entered
When we are considering rolling-out versus rolling out-and-up, we turn to the “What Now” tab of the Ellman Calculator:
Rolling Calculations: Information Entry
The “What Now” tab of the Ellman Calculator: Calculation Results
VEEV Rolling Calculation Results
Discussion
Based on the information Larry provided, we have the following rolling choices:
1. $165.00: 1.67% 1-month return with 4.1% protection of that profit
2. $170.00 strike: 2.82% 1-month return with 1.2% protection of that profit
We evaluate our initial time-value return goals, personal risk-tolerance and make a call. It will vary from investor-to-investor. If neither return is appealing, we “allow” assignment and use the cash in a new position with a different underlying on Monday.
*** Larry thanks for sharing your trades and great job using our exit strategy arsenal!
New Year discount offer ends Sunday
| As a genuine thank you to the thousands of BCI members, followers, and supporters who’ve made us who we are in the international options investing community, we’ve set up a special promo code to offer you the ability to get 20% off on any/all products available for purchase at the BCI Store. That’s right! Any and all products. Get started with, or expand your library of covered call writing, cash-secured puts, and stock option investing resources today, and become CEO of your own money in 2020. Use coupon code BCI20OFF at checkout. Expires Sun, 1/5/20 at 11:59pm ET US http://www.TheBlueCollarInvestor.com/store |
Your generous testimonials
Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:
Hi Alan,
I have been involved with the stock market since 2005. I had some good times but never consistent until covered calls. I appreciate all your videos and I literally have most of your books. My average return was 2.3% and that’s entering some trades in the 2nd week of the contract cycle.
Thanks for everything you do,
Mark
Upcoming events
1. February 6th – 9th 2020 Orlando Money Show
3- Hour Masters Class Saturday February 8th 1:45 – 4:45 PM
BOOTH 306
2. Tuesday March 10, 2020 Long Island Stock Traders Meetup Group
7 PM – 9 PM
Plainview- Old Bethpage Public Library
Covered Call Writing Blue-Chip Stocks to Create a Free Portfolio of Large Tech Companies
***********************************************************************************************************************
Market tone data is now located on page 1 of our premium member stock reports and page 8 of our mid-week ETF reports.
*********************************************************************************************************************