[19 Jan Trades] PLTR & NIO Weekly CC Contracts, Collected SGD$1k Premium (9 days DTE) | How To Generate Returns When The Market Is Going Down

On 19 Jan 22, the stock market continued to tumble for most of the stocks that I own. Last Friday (14 Jan 22), I closed some of my covered call positions in Palantir and Pinterest and made USD400 in 2 trading days, while these stocks are falling in share price.

Yesterday (19 Jan 22), I close these covered call positions in Nio and Palantir (see bold brackets for my final premium collected when contracts were closed).

Name of StockStrike Price (USD)Premium Collected (USD)Returns (%)
Nio3274 —–> (62)1.62 (1.36)
Palantir1614 x 40 = 560 —-> (462)1.85 (1.53)

After locking in the profits for Nio and Palantir, I opened up another 2 weekly covered call contracts for these 2 stocks and the contracts expire next Friday (28 Jan 22). I adjusted the strike price to make it close to ATM CALL and collected another round of premium.

Name of StockStrike Price (USD)Premium Collected (USD)Returns (%)
Nio291302,85
Palantir1514 x 49 = 686 2.27

The returns are higher this time round, probably due to a higher IV that is caused by the upcoming earning season. If the share prices of these 2 stocks stay the same or even go lower than yesterday’s closing price, then I will keep the premium (USD816/ SGD1.1k) without having to sell away my Nio and Palantir shares, which translates to more than 2% returns in 9 days.

This is one strategy that I use to keep generating returns when my existing stocks are falling in share prices and helps to reduce the average (breakeven) prices of the stocks that I own. The risk of this strategy is covered in my previous article and you can read more about it here:
How I Do Earn Even When The Stock Market Is Bearish?

I hope this article is useful to you, especially when the continual falling share price is making you feel demoralized and depressed about investing/ trading. Hang in there and keep your morale high to win the battle and the war!

***
Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading

The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread

Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts behind executing these trades:
MY TRADES

Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)

If the bear market in 2022 is making feel depressed as your stocks come tumbling down, read this article to find out how you can use options trading to help you claw back some of your losses as you await market recovery:
How I Do Earn Even When The Stock Market Is Bearish?

I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day

I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021

This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months

4 thoughts on “[19 Jan Trades] PLTR & NIO Weekly CC Contracts, Collected SGD$1k Premium (9 days DTE) | How To Generate Returns When The Market Is Going Down

  1. What is your average price per share on PLTR and do you sell close ATM covered calls weekly? At what delta? What if the price shoots up?

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    1. Hi Sam, my average price for PLTR is $20.64, been buying PUT at $28 previously but due to the high premium collected over time, I have managed to average down. Yes, I sold ATM CALL weekly (instead of monthly) to lower the risk of price spiking up which in turn means I have to sell at a loss or buy back the contract at a huge premium. I ever sold monthly call options but these stocks are too volatile and I ended up losing money because they can stay sideways for 3 weeks and then suddenly spike up in the last week.

      You may find this article useful:
      https://learninginvestmentwithjasoncai.com/2022/01/06/how-i-do-earn-even-when-the-stock-market-is-bearish/

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  2. I feel like option strategy is still not for me but definitely something that in the future I would love to understand more. Thanks for the guides I will look into those.

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