#18 Covered Call Sell: ET MAY 31'19 15 @0.14

Updated: 11 February, 2020 seen 36

On May 20, 2019, I made sold the following covered call -  ET MAY 31'19 15 @0.14

I made this options trade just shortly I got assigned 100 shares of ET at USD 1,500 on May 18, see: Put Selling: ET MAY 17'19 15 Put @0.35

My original plan, in case of assignment, was to sell most of the shares, but for now, I decided to experiment with weekly/bi-weekly covered calls:

Now, this trade actually comes out of my league, as I tend to write puts only on stocks costing ~ $6.00 per share, as $600 is the approximate budget on a monthly basis I can afford to spend with ease and no regrets on an options trade. In the case of ET, if I will be assigned 100 shares of it, it will cost me $1,500. To stay on the track here is the plan - I will sell off shares worth $900, leaving me with shares worth $600 or about 40 shares of ET, which I'm ready to hold for long and collect dividends.

I could take May 24 weekly call, but the total premium of just $0.06 + $2.4 commission didn't seem attractive at all, that's why I decided to go with a bi-weekly covered call.

Got for this trade a premium of $14, but I will be obligated to sell 100 shares of ET if the strike price will be  $15 and more per share by May 31, 2019. Now as ET is currently trading below $15, there is a huge chance I will keep the stock and premium.

Break-even price: $15.14

This latest covered call also gives 25.66% yield annually