A quick move in my Roth IRA...WEAT

C

Cabin111

Had about $3,000. in my Roth...Didn't know where to put it.

I bought 300 shares of WEAT at $7.91...I then did a covered call for the Jan 23 $8.00. I got filled at $1.01...$300.95 including commissions (at Fidelity).

Climate change, Russia, supply chain bottlenecks will not be fixed quickly.

It this doesn't get called away...Wash rinse repeat on the option.
 
With respect, you're sitting just below breakeven (ie: small unrealized loss) on the covered call position you already wrote on March 11, 2022 [WEAT @ $9.89, premium @ $1.65 for Oct22 $12 strike]. The premium you collected doesn't quite cover the unrealized loss on WEAT [now @$7.91] so overall you are at a net loss.

Are you running this again because you expect WEAT to rebound? Otherwise, you're just throwing good money after bad. So far, that trade was a losing trade.

UNLESS, you're of the philosophy that you can psychologically separate the ETF and the call (after the fact) and since the ETF hasn't been sold (or called away) then that loss "doesn't count" since it hasn't been realized yet. If that's the case, I don't agree.

Suppose you get to the expiry date and you have an unrealized net loss. Then you can either close the position (realize the loss), hold the ETF (essentially a new, forced speculative long on WEAT) or write another call. Writing the call could kick the can down the road, but you might also force yourself into a loss since your upside is capped by the call (depending on the exact numbers at the time... but they are out of your control.)

https://www.elitetrader.com/et/thre...-then-did-a-covered-call.365678/#post-5561131

My apologies if I'm sticking my nose where it doesn't belong. It just seems to me that you're doubling down on a losing trade... or maybe you're extremely confident that WEAT will rebound and your original trade will work out, but if that is the case, why write another covered call? If you're truly confident that WEAT will go up from here, there are other ways to play it.

Good luck. :)
 
Statistical Trader said:
With respect, you're sitting just below breakeven (ie: small unrealized loss) on the covered call position you already wrote on March 11, 2022 [WEAT @ $9.89, premium @ $1.65 for Oct22 $12 strike]. The premium you collected doesn't quite cover the unrealized loss on WEAT [now @$7.91] so overall you are at a net loss.

Are you running this again because you expect WEAT to rebound? Otherwise, you're just throwing good money after bad. So far, that trade was a losing trade.

UNLESS, you're of the philosophy that you can psychologically separate the ETF and the call (after the fact) and since the ETF hasn't been sold (or called away) then that loss "doesn't count" since it hasn't been realized yet. If that's the case, I don't agree.

Suppose you get to the expiry date and you have an unrealized net loss. Then you can either close the position (realize the loss), hold the ETF (essentially a new, forced speculative long on WEAT) or write another call. Writing the call could kick the can down the road, but you might also force yourself into a loss since your upside is capped by the call (depending on the exact numbers at the time... but they are out of your control.)

https://www.elitetrader.com/et/thre...-then-did-a-covered-call.365678/#post-5561131

My apologies if I'm sticking my nose where it doesn't belong. It just seems to me that you're doubling down on a losing trade... or maybe you're extremely confident that WEAT will rebound and your original trade will work out, but if that is the case, why write another covered call? If you're truly confident that WEAT will go up from here, there are other ways to play it.

Good luck. :)
More...

Yeah, I am doubling down on wheat. I'm just talking about $2,373. to place in retirement money. I am looking for cash flow (tax free). Yes, I am down...I'm OK with that. I enjoy options expiring worthless. I very seldom buy back options near expiration dates...Even though the fees are diddly/squat. Over the years it seems to work out for me. The world population is still growing. Except for glutton free people, most all religions/people can and will eat wheat.

And yes, I know about the Russia/Ukraine agreement, with the ports and the Black Sea. However the war comes out, Odesa will be a mess. Whoever is losing the war could bomb the port!! Is Turkey stable?? Russia in the 1950 had huge crops but didn't have the infrastructure to get their crops to market...It rotted in the fields.

I live in California...I'm a former almond grower. The almond industry is in piss poor shape. They can't get containers to ship to Asia (with a big crop ready for harvest). The shippers use to be drop off goods in LA/Long Beach. Then have the ships drop off the containers to the Port of Oakland...Ship to Asia. Countries like China are paying premiums to send empty containers back to them.

What could go wrong with the agreement...New York Times

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjM2tjdwY35AhUMAjQIHfYZCXoQvOMEKAB6BAgGEAE&url=https://www.nytimes.com/2022/07/22/world/europe/russia-ukraine-gain-deal.html&usg=AOvVaw2zBQb-2OjMyYFg9r8jy6u5
 
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Not a bad trade. Although I only do stuff that I know will eventually recover in my roth IRA (no commodities). Still waiting for FXI and GDX to recover. Now I'll only do stuff like SPY and SMH in my Roth IRA.
 
ET180 said:
Not a bad trade. Although I only do stuff that I know will eventually recover in my roth IRA (no commodities). Still waiting for FXI and GDX to recover. Now I'll only do stuff like SPY and SMH in my Roth IRA.
More...

My largest holding in my Roth IRAs are the Royce Family of Funds. RVT, RMT, RGT I have owned over the years. Very good dividends and return of capital. The cool thing about the return of capital is, there is no accounting for it come tax time...Taxes already paid, no adjustments needed...Collect and move on. They are closed and so you sometimes get a discount on total value...
 
Statistical Trader said:
With respect, you're sitting just below breakeven (ie: small unrealized loss) on the covered call position you already wrote on March 11, 2022 [WEAT @ $9.89, premium @ $1.65 for Oct22 $12 strike]. The premium you collected doesn't quite cover the unrealized loss on WEAT [now @$7.91] so overall you are at a net loss.

Are you running this again because you expect WEAT to rebound? Otherwise, you're just throwing good money after bad. So far, that trade was a losing trade.

UNLESS, you're of the philosophy that you can psychologically separate the ETF and the call (after the fact) and since the ETF hasn't been sold (or called away) then that loss "doesn't count" since it hasn't been realized yet. If that's the case, I don't agree.

Suppose you get to the expiry date and you have an unrealized net loss. Then you can either close the position (realize the loss), hold the ETF (essentially a new, forced speculative long on WEAT) or write another call. Writing the call could kick the can down the road, but you might also force yourself into a loss since your upside is capped by the call (depending on the exact numbers at the time... but they are out of your control.)

https://www.elitetrader.com/et/thre...-then-did-a-covered-call.365678/#post-5561131

My apologies if I'm sticking my nose where it doesn't belong. It just seems to me that you're doubling down on a losing trade... or maybe you're extremely confident that WEAT will rebound and your original trade will work out, but if that is the case, why write another covered call? If you're truly confident that WEAT will go up from here, there are other ways to play it.

Good luck. :)
More...

Also wanted to mention (reading the full thread from March), that was a 7 month option. In October (after expiration) I can option the $9. or $10. covered calls...Six months out and gain more income.
 
First option from March, expired worthless today. I made money from the option, but not the trade.

I plan on holding (not optioning), till we hear some news about the Ukrainian war. The first sign of chaos in the Black Sea area, I'll option again...
 
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Cabin111 said:
First option from March, expired worthless today. I made money from the option, but not the trade.

I plan on holding (not optioning), till we hear some news about the Ukrainian war. The first sign of chaos in the Black Sea area, I'll option again...
More...

I've changed my mind. I don't think Russia will bomb the Black Sea ports. They are limited on what they can do, (having to use Iranian drones and soldiers in other area).

So I put in my offer for Jan 24 $12. sell to open for $1.00. I'll sit an wait...60 days. No need to hurry...I don't want to watch the news of the war all day. Here is the bid/ask from Schwab.

Bid 0.85 Bid Size 1000

Ask 1.00 Ask Size 3

Patience grasshopper...
 
Cabin111 said:
I've changed my mind. I don't think Russia will bomb the Black Sea ports. They are limited on what they can do, (having to use Iranian drones and soldiers in other area).

So I put in my offer for Jan 24 $12. sell to open for $1.00. I'll sit an wait...60 days. No need to hurry...I don't want to watch the news of the war all day. Here is the bid/ask from Schwab.

Bid 0.85 Bid Size 1000

Ask 1.00 Ask Size 3

Patience grasshopper...
More...

But then this happened over the weekend...

I've put in a cancel for my option...Wait and see.

 
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