Cost of Covered Call Strategy

One of the harder things for me to see is when my covered call positions go deep in the money and I don’t participate in the share price gains. I understand this is what happens, but it makes waiting to expiration a little tough sometimes.

I purchased SPIL after the May expiration at $9.91 and sold the July $10 call for $.55 for a nice 5% gain for 2 months. The stock was up $.56 today to $12.07. The good side is the trade will be profitable exactly as planned.

I discussed Silver Wheaton SLW in my last post. From a low this week of about $11.60 the stock closed today at $13.17, up 68 cents today alone. I have sold the August $12.50 call on this stock so it has also moved in the money. Depending on where the option premium goes the next several weeks I may roll this option out to a $15 strike in September or October. The growth prospects and the option premium to be sold make this stock one that I will want to stay with for buy/writes.

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