Rolled IWM Covered Calls

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page. 

UNDERLYING ETF:  IWM

DESCRIPTION: iShares Russell 2000 

TRANSACTION TYPE: Roll Out and Up

Small Cap stocks continued to rise and CCI rolled the  covered call position as described below.

 

TRANSACTION DATE: Feb. 28

Action: Buy to close

Exp. Date: Feb. 28,  2014

Strike: $116

Price: $2.32

 

Action: Sell to Open

Exp. Date: Mar. 14, 2014 (out two weeks)

Strike: $118

Price: $1.58

Rolled Small Cap Covered Call

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page. 

UNDERLYING ETF:  IWM

DESCRIPTION: iShares Russell 2000 

TRANSACTION TYPE: Roll Out and Up

Small Cap stocks have snapped back recently and CCI was forced to roll the  covered call position as described below.

 

TRANSACTION DATE: Feb. 21

Action: Buy to close

Exp. Date: Feb. 22,  2014

Strike: $112

Price: $3.82

 

Action: Sell to Open

Exp. Date: Feb. 28, 2014 (out one week)

Strike: $116

Price: $0.87

Rolled EEM Covered Call Out and Up..Twice

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page.

UNDERLYING ETF: EEM   
DESCRIPTION: iShares Emerging Market Shares   

TRANSACTION TYPE:    Emerging market stocks have bounced back somewhat from their lows.  CCI adjusted the covered call position as follows.

 

TRANSACTION DATE: Fri. 02/14/14

 

Action: Buy to Close

Exp. Date: Feb. 14,  2014

Strike: $.39

Price: $.65

 

Action: Sell to Open  

Exp. Date: Feb. 22, 2014 (rolled out one week) 

Strike: $40

Price: $.23

 

Action: Buy to Close

Exp. Date: Feb. 22,  2014

Strike: $.40

Price: $.13

 

Action: Sell to Open  

Exp. Date: Mar. 7, 2014 (rolled out two weeks) 

Strike: $40.50

Price: $.24

Rolled SPY Covered Call Out and Down

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page.

UNDERLYING ETF: SPY
DESCRIPTION: SPDR S&P500  

TRANSACTION TYPE:    The recently adjusted Feb SPY covered call continued to erode with time doing its job of providing a small hedge for the held underlying.  The option had decayed to a point where CCI rolled out the call to the next month as described below.

TRANSACTION DATE: Thurs. 02/06/14

 

Action: Buy to Close

Exp. Date: Feb. 22,  2014

Strike: $183

Price: $.18

 

Action: Sell to Open  

Exp. Date: Feb. 22  2014 (rolled out until next month) 

Strike: $182

Price: $ 1.12

Re-established EEM Covered Call

The Index Covered Call Trading Plan  (aka: ICC) is CCI's approach for managing a position of index ETFs and related covered calls.  The most recent trade against this plan is described below.  A reader can find details about the rational and management of the trades at the ICC trading plan tab on CCI's home page.

UNDERLYING ETF: EEM   
DESCRIPTION: iShares Emerging Market Shares   

TRANSACTION TYPE:    Emerging market stocks continued to fall  making the prior covered call position obsolete quickly. CCI let the last covered call position expired, and  re-established the covered call position. Details below.

TRANSACTION DATE: Tues. 02/04/14

 

Action: Buy to Close

Exp. Date: Jan. 31,  2014

Strike: $41.50

Price: $.00 (expired)

  

Action: Sell to Open  

Exp. Date: Feb. 14, 2014 (rolled out nearly two weeks) 

Strike: $39

Price: $.24

Continuing to Roll C Covered Call

Financial stocks (Specifically both XLF and C which are held in this paired option position) continued at the end of the week.   Hence CCI harvested the option premium gained in the C Covered call and rolled the position as described below.

• Bought back the Feb 28, $52.50 call in C at $.24 (capturing a modest $.18/contract profit)
• Sold the Mar 7 (out an additional week), $51 call in C for a $.51/contract credit.

This position was initiated on  Jan 8, 2013. The performance of various potential holdings as of the time of this trade are shown below:

• The XLF etf has been up with the rest of the market. Just buying and holding the XLF over this period would have returned a very nice 22.8 %.  
• The leverage obtained by instead simply holding the Jan 15 $10 call would have generated an  unrealized, leveraged, capital gain of 58.4%. 
• The leveraged, long/short strategy defined in this thread is up  54.3%.  An outstanding gain with somewhat less risk/leverage than holding a naked  LEAP.