With regard to the use of CCs, I have 2 approaches:
1st one is, I am in for max gains on the calls, don't care if I
lose the shares (and will make some on the shares if I do have them
called away). Thats what i have been doing on RKLB. (cleared $1600
in gains for this weeks efforts on 400 shares). And prefer to do this on a
weekly basis on something with a high call volatility/premium.
But the downside is, now I have to decide whether or not I want another round of
shares. And given how hot it ran? Won't touch the shares now till it consolditates
this rather ridiculous move it made (wonder if it was driven by a short squeeze cause the
volume was huge) Nothing worse than buying shares, selling calls and watching the share
price give 'more than desired' back.
Note: I might buy some ITM puts IF I sense the shares are about to pull back..
The 2nd way is to sell deeper OTM calls on shares I don't want to lose. Don't make as much.
But my best was years ago on MNKD while it was SLOWLY moving higher in anticipation of being
approved. On 34000 shares? I was clearing $6000/month by selling the calls on a weekly basis.
Few months due to the activity level (volatility), cleared $10K in gains..
So IF I owned the shares and wanted to keep them? After this run? But not knowing WHY it ran
this hot? I might see what happens on the open on Monday and sell some calls a few $ higher than
the share price at the time and hope it goes into a consolidation vs continuuing to run up..
Good luck But at the moment? I am out
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