Cycle Trading

[Duma]

I got a nice 60min buy this morning on SQ, so I executed my covered call strategy I talked about last week. This maybe a short lived trade, if the general market turns around which I expect it to do. But at least I will have some experience.

So this morning I bought 100 shares of SQ for 213.27 and after making an adjustment on my original sold call ended up was a Feb 26 220 for a credit of 13.89. Stock price is already above the strike price. I stand to gain 20.62 ($2062) on the trade if price stays up, 9.7%. This is on a 29 day trade so just keep repeating.

Since the call has a 50% delta, I have made close to $400 today as price moved up, although that could evaporate in a heartbeat. The credit of 13.89 gives me a lot of downside protection, so not sure yet how I will play a drop. I could sell stock at 200, kept the call and still BE.

Hard to tell from the daily chart if this was just a quickie pb or not. Everyday a new day full of decisions.