With the share price at $15.48, I bought 150 shares. I sold a put with a strike price of $15, expiring February 18, 2022 and a covered call with a strike of $16, expiring the same date. I brought in $103.66 cash for the two options. The next day, the share price had dropped a bit, so I sold another put with a $15 strike, expiring January 21, for $30.33.
My History of Trading META
This is my first trade with META. My current adjusted cost basis/breakeven on the shares I own is $14.59/share, which will increase a bit if I am assigned on either of the $15 puts. (I am hoping for this outcome.)
Goals and Thoughts for Trading Options on META ETF and Buying Shares
The holdings in this ETF include several companies that I like a lot, including NVDA, FB, MSFT and RBLX. Many of those stocks have a share price that is too high for me to comfortably trade options with them, and the META share price of less than $20 means I can build a long position and trade both calls and puts around it to generate extra income and lower my breakeven.
I expect this to be a growth position, so I have to be careful not to sell too many calls at one time. The share price will likely get ahead of them and cut into my capital gains, so I will build the position and only will sell one call at a time, with a strike that adds to my profits if I have to take assignment.
My general practice with short calls is to roll them straight out for > 15% annualized returns, or increase the strike if 1)I can generate > 10% annualized returns and 2)I think it will help me be able to hold on to the shares.
If the $16 call goes in the money, I'll either try to roll it or accept assignment and sell puts to try to buy back the shares for a $16 breakeven.