When HLF drop suddenly, I decided to pick it up and sell Covered Call. Modified slightly from Alan Ellman’s strategy (https://optionkaki.wordpress.com/2016/02/13/book-review-selling-cash-secured-puts-by-alan-ellman/)
|BOT +100 HLF @58.00 ARCAMARK=58.00 IMPL VOL=42.34%|
|SOLD -1 HLF 100 (Weeklys) 26 AUG 16 59 CALL @.30 NYSEMARK=58.39 IMPL VOL=51.14%|
|SOLD -1 CALENDAR HLF 100 (Weeklys) 2 SEP 16/26 AUG 16 59 CALL @.91MARK=59.00 IMPL VOL=52.06%|
|SOLD -1 CALENDAR HLF 100 (Weeklys) 9 SEP 16/2 SEP 16 59 CALL @.34MARK=62.46 IMPL VOL=50.16%|
I did an automated standing order to rollover when the price climb up to $59 and subsequently just continue to do manual rollover to collect further premium. The average cost of HLF is $56.50 from $58.00 with 3 weeks of premium collected. Estimated ROI of 4.4% in 3 weeks.
Sell covered call is a good strategy for bullish equities.
(See Meerkat’s note on rolling covered call https://optionkaki.wordpress.com/2015/12/05/option-strategy-covered-call-with-rolling-by-meerkat/)