In yesterday’s catch up post, I shared my next actions this week. So here’s what I did:
First with GE, I took current cash holdings and doubled down on GE calls 3x 03/19/21 12.00 and 2x 06/18/21 12.00. In this morning’s trading, GE was initially down and I know this is still a position I want so I bought in again, at a lower cost the my initial.
Ok second is VLDR and this was a little nuts. Trading mostly flat through the day and my prior CC has 1 month remaining and $35-40 of extrinsic value. So I rolled my CC to the next month, 2/19/21 30.00. Before commissions, I netted $103 on the roll forward, and $208 in premiums overall. Here’s my tracking table. I built this in Excel to track my CC strategy against my overall goals.
Honestly, I was patting myself on the back for rolling my CC forward. Then I shut it down for the day. I look back after close and VLDR isn’t up 1-2% like it was this morning. After 3:30, news broke that Apple is launching a car in next 4-5 years. VLDR closes up 23% to $24.68 and is up another 8% in after hours trading to $26.65. What the fuck – there’s only a small mention of lidar at all and even says Apple could use their own. Also, LAZR +27%, Innoviz +13%.
Lots of competing thoughts and feelings. First – great, I own 100 shares. Then oh shit I just wrote a CC for 60 days from now. That is so much time. And then even worse – the call I sold for $140 is now selling for $460. Hell, I could’ve bought back the same call I closed for another $230.
Trying to distance myself from my initial reaction, I think I needed to be more patient. I shouldn’t have closed my position this morning – I need to wait until 2 weeks or so before expiration date. More discipline on that front. If I waited, and then was tempted to close and write again at the end of today, but now at the higher rates, I would net maybe another $50, but still in the same 60 days to expiration. And as I think about it, I was feeling bad about not timing my actions today, but more so about extending my open call to 60 days. Part of selecting VLDR (aside from wanting to own) is that a higher level of IV will net me additional premium while keeping my strike high OTM and expiration less than 45 days. I broke my second half rule today.
Over the next 60 days, I might miss out on gains over $30, but I knew the trade offs when I opened the position and I’m reminding myself that I’m still ok with 60% return in 2+ months.