Thread by @wealthcoachmak

A brief thread 🧵 about a $JNJ Covered Call

It almost went out of hand but stayed patient with it

In the end it worked out

I created $263 of my own dividends in April and May 🔥🔥🔥

Initial call sold on April 3:

- 4/14 $160c
- Premium: $44

#OptionsTrading #Optionselling

Soon after selling that call the price of $JNJ spiked up

It reached $166+ before the expiration date

$6+ more than my strike price

I wasn’t ready to lose my shares

So I rolled to same strike of $160 a week forward to 4/21

Added premium: $47

$JNJ stayed relentless and didn’t budge much

It closed at $162.5+ by the 21st

So I had to roll the option forward again

Again a week forward and same strike price

4/28 $160c

Added premium: $55

Another week same old story

$JNJ reached $163+ by the 28th

Another rollover

5/5 $160c

Added premium: $63

More premium because I rolled over earlier than usual

2 days before expiration

The price hadn’t got too out of hand yet

Same story this week as well

$JNJ staying between $162 and $164

Closed May 5 below $164

Another rollover

5/12 $160c
Added premium: $72

Collecting premiums and still keeping my 100 shares

Finally this week I was seeing the light at the end of the tunnel

$JNJ on May 12 was hovering between $160 and $161

It could expire worthless but by the afternoon it was still $.50 more than my strike

So I rolled again but this time to $162.5

I gave up some premium: - $18

Ok so why did I go to $162.5 now and not before

The ex-div date for $JNJ is coming up

If the option is ever going to get called early it is near the ex-div date

So I wanted to go slightly out of the money for my new strike

And finally on May 19 $JNJ finished below my strike price

My option expired

After all the juggling and maneuvering the option expired worthless

I collected $263 in premiums and didn’t lose my shares

The $263 is more than the quarterly dividend I get from $JNJ

🔥🔥🔥

Learn how to sell options

Using your cash or your stocks

It enhances your overall yearly return

Is it free money? No

Are there risks? Yes

But those risks can be managed