Volatility is back, and as I'm facing some liquidity issues I started to look for ways I could squeeze some additional juice from existing positions - as I have two deep ITM put options on EWZ Brazil ETF, I decided to sell some naked calls on them to generate some additional income + release some margin.
That said - I don't have actually 100 shares to deliver if challenged. In case of danger, I will roll up and forward this call option.
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
here is the trade setup:
SLD 1 EWZ DEC 03 '21 30.5 Call Option 0.15 USD What happens next?
On the expiry date, December 03, 2021, EWZ is trading under $30.5 per share - options expire worthlessly and I keep premium - if EWZ trades above $30.5 I'm troubled as I need to deliver shares I don’t have, to avoid such scenario I will try to roll up the strike price
Break-even price: $30.5+$0.12= $30.62