VXX: collect $68 (0.65%) premium from these covered calls with strike at $49.
Contract expires next Fri on 29th Aug.
Strike selected is based on breakeven of holding cost so it's designed to maximise premium collection without taking a loss on the underlying stock holding.
If VXX continues to fall, then at some point will have to adjust the short calls lower to make sense for any premium collection.
Volatility had been low and dropping steadily since the early April tariffs shocks.
Since then, there were 3 other incidences where the VIX (underlying volatility) were trading above $20 with the last one on 1st Aug.
Looking forward for a major spike for me to offload my long positions else the decays are eating into my profits as part of bearish hedge.
Latest trading day on Tuesday 19th Aug is slightly higher, but insignificant unless it's sustained over multiple days.
| Side | Price | Filled | Realized P&L |
|---|---|---|
| Sell Open | 0.34 2Lot(s) | -- Closed |
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- DIMCO·2025-08-20Great strategy1Report