Feb. 4 at 10:40 PM
$LXRX Good option trade buying shares at
$1.30 and then selling Jan 2027
$1.50 covered calls for
$0.46/share dropping your net cost to
$0.84/share
If they do get called at
$1.50, you profit by
$0.66 which is
$0.66/
$0.84=0.786 or 78.6% in 11 months
Just do this with trading shares; not your core holdings
Alternatively, sell the Jan 2027
$1.50 Puts for
$0.65/share so your net cost will be
$0.85/share if the shares are put to you or you get to keep the
$0.65/share and not get any shares of LXRX is above
$1.50 on the 3rd Friday of January 2027.
But, the covered calls strategy of buying trading shares makes the share price go higher by locking up some of the float.
I have been making really good bank with my trading shares with most of my options expired in Jan this year and only sold a few additional contracts before this latest drop from last Friday. But, I did sell some
$2 Jan 2027 convered calls for nearly
$0.45 when LXRX went over
$1.70 but that time was too brief to do many
