Selling a SPYG Covered Call for Steady Premium Income
As part of my ongoing strategy to generate income and hedge my portfolio, I recently sold a SPYG covered call with a strike price of $91. Currently, SPYG is trading at $88.30, meaning I have some built-in profit potential if the stock stays below my strike price. More importantly, the premium on this contract is $1.38, and with 45 days to expiration, the theta decay is working in my favor at $0.03 per day.
Why This Trade Makes Sense
1. Solid Premium Income 💰 – Selling a call at $91 while SPYG trades at $88.30 gives me a good buffer. The premium of $1.38 translates to instant income, reducing my cost basis and providing downside protection.
2. Controlled Risk 🔒 – If SPYG remains below $91, I keep my shares and the premium. If it rises above $91, I still profit from the price appreciation up to the strike price, plus the premium.
3. Theta Decay Advantage ⏳ – With a daily theta decay of $0.03, the time value of the option is eroding in my favor. Over time, this will help me close the position at a lower cost or let it expire profitably.
The Bigger Picture
This trade aligns with my strategy of collecting premiums while managing risk. With 45 days to go, I have flexibility—if SPYG moves significantly, I can roll the call further out or adjust my position accordingly. In the meantime, the steady theta decay helps ensure that I’m getting paid daily as time works in my favor.
Final Thoughts
Selling covered calls on SPYG allows me to generate passive income while maintaining exposure to the market. I’ll monitor this position closely, ready to adjust if needed. For now, I’m happy with the setup: a profitable strike, a solid premium, and favorable theta decay.
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Disclaimer: This is not financial advice. I am simply documenting my trades and strategies for personal reference. Always do your own research before making any investment decisions.
@TigerStars $SPYG 20250221 91.0 CALL$ @Daily_Discussion @TigerEvents @TigerTradingNotes@TigerStars @MillionaireTiger thanks for the support
| Side | Price | Realized P&L |
|---|---|---|
| Sell Open | 1.38 | +9.43% Holding |
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