I spent time this weekend to gather better information about the holdings in my margin account. I realized that I wasn’t working with a good set of numbers and the only way I can be successful is to work with the numbers. So, I decided to look at the value of CMCSA and PG when I transferred them in to my margin account. I set the baseline for my CMCSA and PG stock at the closing prices for March 2, 2020. I also recorded the last dividend amounts for CMCSA, LUV and PG. Now I can use these numbers (along with others) to help me set better goals and make better decisions.

Here are the numbers I worked with this morning:

CMCSA

  • Stock price baseline: $42.52
  • Dividend: 0.23
  • After hours trading price: $37.31

LUV

  • Stock price baseline: $30.00
  • Dividend: 0.18
  • After hours trading price: $29.30

PG

  • Stock price baseline: $119.56
  • Dividend: 0.7907
  • After hours trading price: $116.75

I entered a Sell to open for one CALL on CMCSA at a strike price of $38.50 with an expiration of May 8, 2020 at a premium of $0.30. Taking into account the commission, this would give me approximately a 0.75% return for the week. The Bid/Ask is $0.12/$0.26. The last trade is $0.19 at 3:39PM Eastern on Friday, May 1, 2020. So, that Bid looks pretty low. The BidXAsk sizing is 155X90. So, I think I’ve got a good chance to do better than the Ask. Assuming that I am able to sell the contracts, I’d be hoping that I do not get assigned.

Given that I’m hoping to not be assigned, here is why I still decided to take the risk. The highest two closes for CMCSA in the last month are: $39.00 on Wednesday, April 29, 2020; $38.52 on Tusday, April 14, 2020. Both of these are higher than my strike price. However, all eighteen other closes in the past month were below my strike price. Also, the stock took a large drop on Thursday, April 30, 2020. This past Friday, May 1, 2020, it had opened at $37.14. It closed at $36.98. It had a range for the day of $36.78 - $37.51. I felt I could have played it much stronger last week and I’m looking to do better this week. The stock did hit a high of $39.00 in after hours trading at 5:30PM Eastern on Friday. But, it quickly dropped to $36.98 by 5:50PM Eastern.

I entered a Sell to open for four CALLs on LUV at a strike price of $31.00 with an expiration of May 8, 2020 at a premium of $0.50. Taking into account the commission, looking at the money invested in the stock, and assuming I get assigned this would give me approximately a 5% return for the week! Calculating the simpler return of premium versus strike, and subtracting the commission this would give me approximately a 1.58% return for the week. The Bid/Ask is $0.35/$0.40. The last trade is $0.39 at 3:59PM Eastern on Friday, May 1, 2020. So, that Bid looks pretty low. The BidXAsk sizing is 151X3. So, I think I’ve got a really good chance to do better than the Ask. Assuming that I am able to sell these contracts, I’d be perfectly happy if I got assigned.

I entered a Sell to open for three CALLs on PG at a strike price of $119.00 with an expiration of May 8, 2020 at a premium of $1.10. Taking into account the commission, looking at the money invested in the stock, and assuming I get assigned this would give me approximately a 0.45% return for the week. Calculating the simpler return of premium versus strike, and subtracting the commission this would give me approximately a 0.92% return for the week. The Bid/Ask is $0.78/$1.00. The last trade is $0.87 at 3:59PM Eastern on Friday, May 1, 2020. So, that Bid looks pretty low. The BidXAsk sizing is 109X1. So, I think I’ve got a decent chance to do better than the Ask. Assuming that I am able to sell these contracts, I’d be okay if I got assigned. I would be hoping that I could turn around in a future week and get assigned on a PUT at a lower strike price to bring down the baseline price I’m using.

I give thanks to the Universe for the abundance it provides me. I surrender and am open and ready to receive.

Bhavatu sabba mangalam - May all beings be happy