... for a 1.66/contract credit.
Metrics:
Probability of Profit: 49%
Max Profit: 1.66 ($166/contract)
Max Loss: 14.34 (which equals the cost basis in any stock I'm assigned)
Break Even: 14.34
Notes: Put on at the 70 delta strike, this is a synthetic covered call with a buying power effect that is far smaller (~20% of the max loss or $246/contract) as compared to a straight up covered call where you'd buy 100 shares at 14.58 for $1458 and then sell, for example, the March 23rd 30 delta short call at 15.5 for a piddly .35, resulting in a cost of 14.23 ($1423) to put on, so one of the pluses to this strategy is lower buying power effect.
Granted, having the shares themselves entitles you to the divvies (the yield is currently 3.32%), and you won't get those with a naked short.
However, some frown on covered calls as being "capped out" in terms of profit. While that can be partly addressed through rolling the short calls for strike improvement/cost basis reduction, the synthetic is more flexible, since the short put can be rolled up as price moves toward it and over it if that's what you want to do with the play (which is basically continually reduce cost basis in potential assigned shares "up front", after which you'd then proceed to cover via short call).
Here, however, I'm looking to take profit at 50% max or .83 ($83)/contract, so I don't necessarily need price to break the short put completely ... .
Metrics:
Probability of Profit: 49%
Max Profit: 1.66 ($166/contract)
Max Loss: 14.34 (which equals the cost basis in any stock I'm assigned)
Break Even: 14.34
Notes: Put on at the 70 delta strike, this is a synthetic covered call with a buying power effect that is far smaller (~20% of the max loss or $246/contract) as compared to a straight up covered call where you'd buy 100 shares at 14.58 for $1458 and then sell, for example, the March 23rd 30 delta short call at 15.5 for a piddly .35, resulting in a cost of 14.23 ($1423) to put on, so one of the pluses to this strategy is lower buying power effect.
Granted, having the shares themselves entitles you to the divvies (the yield is currently 3.32%), and you won't get those with a naked short.
However, some frown on covered calls as being "capped out" in terms of profit. While that can be partly addressed through rolling the short calls for strike improvement/cost basis reduction, the synthetic is more flexible, since the short put can be rolled up as price moves toward it and over it if that's what you want to do with the play (which is basically continually reduce cost basis in potential assigned shares "up front", after which you'd then proceed to cover via short call).
Here, however, I'm looking to take profit at 50% max or .83 ($83)/contract, so I don't necessarily need price to break the short put completely ... .
交易手动结束:
Covering here for a 1.56/contract (Happy Meal Profit) to rotate into non-single name risk ... .