[3 Feb Trades] As Market Falls, I Continue To Sell Covered Call, OTM Call This Time Round

The market fell on 3 Feb 22, dragged down by poor performance by Meta Platforms (Facebook). The growth stocks that I owned (Nio, Palantir, Pinterest) continued their downtrend from the day before (2 Feb 22). In a falling bearish market, my strategy is to sell covered calls to earn some premium. So, I open up the below positions over 2 Feb and 3 Feb, with an expiration date on 4th Feb22.

Name of Stock	Average Price (USD)	Strike Price (USD)	Current Share Price (USD)	Premium Collected (USD)	Returns (%)
Pinterest	63.5	31.5	24.51	60	0.94
Nio	43.5	25	23.13	25	0.57
Palantir	21.78	14	12.45	14 x 13 = 182	0.59
Apple	181.5	177.5	172.90	45	0.24
Tesla	1082	950	891.14	260	0.24
			Subtotal	572

The returns are much lower than my previous covered call contracts, not only due to the shorter expiration date of 2 days (4 Feb 22), but also I sold OTM call contracts instead of ATM call contracts. This is to lower the risk of a price spike and I have to frantically buy back the contracts at a loss to prevent them from being exercised.

I am selling at a price that I feel will not (or low chance) be reached by the expiration date. If the share prices of yesterday’s closing remain on 4th Feb or close lower, I do not need to sell away my existing shares.

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