Covered Calls with Reinis Fischer

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Buying LEAP Call Option with Virgin Galactic SPCE stock to protect from losses and profit in future
coveredcalls.reinisfischer.com

Buying LEAP Call Option with Virgin Galactic SPCE stock to protect from losses and profit in future

Reinis Fischer
Jun 9, 2021
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Buying LEAP Call Option with Virgin Galactic SPCE stock to protect from losses and profit in future
coveredcalls.reinisfischer.com

As I was mentioning in my YouTube video, today I bought a LEAP call option on SPCE stock to protect my account from future losses.

Let me explain - I’ve been buying SPCE stock for the past couple of months, currently holding 215 shares.

Average stock buys price $24.64.

Also, I have been selling covered call options and to spice it up I was selling some naked call options.

In total 5 call options contracts with different strike prices and different expires. .2 covered and 3 naked call options

With the recent steep price incline above $35 per share, those uncovered call options started to suffer a lot and affected the total portfolio.

I did a few roll-ups, managed to increase strike prices from $22 to $26, but still feeling worried about those 3 uncovered call positions, decided to buy a long expiry SPCE call option.

here is my trade setup:

  • BOT 1 SPCE JAN 20 '23 20 Call Option 23.30 USD

I paid $2,330 to buy January 20, 2023, SPCE call option with a strike price of $20. Alternatively, I could buy 100 shares with SPCE paying $3,700… so I’m saving some money here already, but I have to be careful and not let this contract expire.

Anyhow this contract is more than 2 years long and I can now control 100 shares with SPCE. I’m very confident I will get out of this trade quite earlier, but you never know.

What happens next?

I now have 3 covered call contracts out of 5.

If SPCE keeps increasing in price, my losses are stopped here for at least one contract. Two to go. If SPCE decreases in price, I will have a chance to take advantage and close the losing two calls.

Might sound complicated, I agree

by the way, here is the video, I talk about these things

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Buying LEAP Call Option with Virgin Galactic SPCE stock to protect from losses and profit in future
coveredcalls.reinisfischer.com
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