COP did move against me. For now, I'll just sit and collect the 3%+ dividend. It's more than my cash would collect. But one point I was making is that I'm ahead of B&H now too, -5.4% vs -8.4%. But I will continue to review the potential calls. For example, possibilities I'm looking at right now:
| Contract Name | Last Price | Bid | Ask | Volume | Open Interest | Implied Volatility | Equity | Expiry | Days | $/Day | aROI | Ex-Div? | Earn? |
| COP160826C00042500 | $0.60 | $0.66 | $0.69 | 5 | 46 | 0.417 | $39.48 | 2016-08-26 | 24 | $0.029 | 26.6% | -- | -- |
| COP160902C00042000 | $0.96 | $1.00 | $1.05 | 1 | 7 | 0.4233 | $39.48 | 2016-09-02 | 31 | $0.034 | 31.3% | -- | -- |
| COP161118C00041000 | $1.91 | $2.13 | $2.17 | 9 | 234 | 0.3254 | $39.48 | 2016-11-18 | 108 | $0.020 | 18.6% | $0.25 | XXX |
| COP170120C00040000 | $3.30 | $3.35 | $3.40 | 87 | 5320 | 0.3364 | $39.48 | 2017-01-20 | 171 | $0.020 | 18.4% | -- | -- |
Notice that in each case, the strike price plus the bid would be over the original $42.79 purchase price of the stock. However, the further down I go in price, the further out I need to lock myself in. Note that aROI does NOT include dividends.
On the one hand, the $40 strike looks good, if there's more downside left. Otherwise, I'd look to the $42 one, since it has the max aROI of the four (as standalone transactions) and only goes out another month.
Summaries of the position based on the $40 call or the $42 call:| Date | Description | Amount | ROI | aROI | Profit |
| 2016-09-02 | If assigned at expiration | $42.00 | 2.90% | 21.59% | $1.24 |
| 2016-08-02 | Current Price @ $39.49 | $39.49 | -2.97% | -60.18% | -$1.27 |
| 2017-01-20 | If assigned at expiration | $40.00 | 3.72% | 7.18% | $1.59 |
| 2016-08-02 | Current Price @ $39.49 | $39.49 | 2.52% | 51.18% | $1.08 |
But four months in between. I might be better off being able to write more calls if I go with $42 now. And I certainly wouldn't be upset if the $42 gets assigned a month from now. :)
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