For those 'who can accept' the potential for a 19% return...
But you're still better off (by .60) than if you had just bought the stock and not sold the calls. The difference in "my" example is that it sold "in the money leap" calls that provided more downside protection (approx 28% protection).
If you had sold Jan $25's you'd have a much lower basis (close to $24.10). Going further towards my original example (where I used leaps): "If" leaps were available you'd probably have a basis "around" $21 (25% downside protection from original purchase price). The potential gain is reduced by selling in the money options but that's the trade off for getting the downside protection. Leaps aren't available for trn but the point is still valid.
INTC Jan-10 $22.50 Puts $5.75 TTWO Jan-09 $17.50 Puts $5.50 BAC Jan-10 $40 Puts $9 TTWO would have to be around $13.75 to get a fill on this order: TTWO Jun-08 $15.00 Puts for $3.60 Need around $13.5 for a fill here: TTWO Jan-10 $20.00 Puts $8.60
The gme puts are really disturbing me because the premium has "barely moved" over the last $1.50 drop in the stock. I "should have been filled" but haven't been.
Still have other open orders that are waiting for fills as well. There's always tomorrow.
For those that don't understand the put sale trade here's an example irt the TTWO's I'm trying to sell. For the example I'm assuming I get a fill for $3.60 with stock at $13.75 "&" that I keep the trade on on the way down (to the indicated price):
If the stock fell to $10 I'd be able to buy the put back for "no more than" approx $6. That would be a $2.4 loss/sh vs. a $3.75 loss/sh by owning the stock from $13.75 to $10. If the stock was at $10 on Jun21st expiration the option would cost approx $5.10 and would equate to a $1.50 loss vs. the same $3.75 loss in the stock itself. Of course, I enter these trades with the expectation that the stock will be well above $11.40 (the break even point) in June.
There "is" more risk in these trades unless you cover by buying puts further OTM than the ones you sell or your short the stock.