August Expiration
Today is the expiration of our August covered calls. While last month was nearly perfect in terms of our trades, this month was a bit choppier. Let’s dive in …
Let’s begin with our EQT (EQT) covered call. In June we bought the stock for 42.5 and sold June calls that expired worthless … then we sold July calls that expired worthless … and then sold the August 40 calls.
Today the stock is trading at 48. My plan is to simply let this position play itself out. If EQT closes above 40 today (VERY likely), we will walk away with a very nice profit (will update the full profit numbers on Tuesday). You do not need to address this position today.
Moving on to JD.com (JD). Two months ago, we bought the stock and sold a July call. When that July call expired worthless, we then sold the August 65 call.
Today the stock is trading at 55. My plan is to simply let this position play itself out. If JD closes below 65 today (very likely) we will let our short call expire worthless, and then we will likely exit our stock position early next week.
Next up is Alliance Resource Partners (ARLP). Last month we bought the stock at 17.60 and sold the August 17.5 call for $1.35.
Today the stock is trading at 23.5. My plan is to simply let this position play itself out. If ARLP closes above 17.5 today (very likely), we will walk away with a nice $125 profit, or a yield of 7.69%.
Fortinet (FTNT) is the only stock in the CPB portfolio that got hit on earnings this month. We had bought the stock at 61 and sold the August 64 call for $2.75.
Today the stock is trading at 52. My plan is to simply let this position play itself out. If FTNT closes below 64 today, the call we sold will expire worthless, and then we will likely exit our stock position early next week.
Finally, let’s dive into Dollar Tree (DLTR). In June we bought the stock for 168.5 and sold June calls that expired worthless … then we sold July calls that expired worthless … and then sold the August 170 calls.
Today the stock is trading at 167. My plan is to simply let this position play itself out. If DLTR closes below 170 today (seems likely), the call we sold will expire worthless, and then we may set another call early next week.
I will update you on the final profits/losses and how we will manage these positions Monday or Tuesday of next week.