BAC has underperformed S&P.
The following is from 2021 Annual Report.
WEB and his successor are better off DCA in S&P. In the above list only Apple is a stand out. The rest of them are mediocre in last 15 years.
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Your excel sheet is not clear.
It is a picture of a sheet. Not sure what issue you are having.
It is not clear what you bought and what options you wrote. Not that I really care, but if you are posting something, perhaps the readers should be able to understand.
The image shows the strike price ($25), date of the leap (Jan 2025) and the premium I paid ($725).
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OK. I give up, why bother. You are having bunch of options and they don’t add up. Whatever good luck.
There is only one Leap (not a bunch of options). The others are covered calls on the leap. The following lines are scenarios that play out in 2025 for that one option.
The point of me posting this is, temporary panic in sound companies can be a low risk alternative to get outsized returns for small investors.
Feel free to ignore.
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One final attempt. Instead of being defensive, you could have attempted to answer. IT is not at all clear what you bought, how many and what you sold. For ex:
Bought 2 Jan 25 $25 strike for $7.25 each and sold one Jan 24 $35 for and one Jan Jan 25 $40 for… would be clear.
You have number 100, is that number of contracts? I guess not; Your break even number is even more confusing, the $28 break even gives a picture you bought one option and sold 2 against it. In which case, $28 is hardly break-even.
Also, when you use the term “covered call”, which is used for selling options against the share ownership. If you are actually doing is buying one option and selling one against it is called spread.
Your excel sheet, the way it is constructed is pretty unclear and gives no useful information. When I said it is not clear, you were dismissive and not attempted to clarify, which is okay. If your attempt is to get a conversation, you can help to clarify your post. If you want to be dismissive, so can I.
@Kingran I explained it (calendar spreads, bull call spreads, covered calls, etc) in great detail in the previous post about a similar trade with a similar spreadsheet (for BRKB instead of BAC).
See here - 15 year BRK PBV Chart - #7 by MarkR
The big (huge!) mistake in the spreadsheet is assuming that the buyer of the covered call will never exercise the option they purchased. Every line below ‘40’ in the second chart is therefore incorrect. I explained that as well in the earlier series of comments on the other post.
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The above is inaccurate. Line 1 is real.
The following lines are scenarios that have not yet played out and no point debating them. e.g. - If BAC trades at $40 in Jan 2024, I am not going to place a call (spread) for strike price of $40.
Repeating: The point of me posting this is, temporary panic in sound companies can be a low risk alternative to get outsized returns for small investors.
I bought more leaps last week.
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It is completely accurate and I explained it to you in great detail on the other (BRK) thread. You LITERALLY write in your own spreadsheet “Price on Jan-2025” and then in the rows below that have various prices. Some of those prices are HIGHER (the ones above 40) than the strike price of the Jan '25 call you sold in chart 1. That makes the numbers in the profit and returns columns of those rows ABSOLUTELY wrong.
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Let’s agree to disagree. Its a modeling exercise and you are taking it literally.
No point in debating this.
BAC share price is up today.
I am not placing any covered call (spread) on the leap yet since the price has moved up from $24 to $30 quickly since the panic. I am worried that if I reach for an attractive premium it will be in the money.
Sold half of my BAC position. If WEB has seen more serious banking issues and sold billions in financials combined with the recent concerns/crisis, I felt like taking less risk. Quarter seemed pretty good yet it seems more real headwinds are coming.
Are you talking about the past sales or something new I missed?
Only referring to the recent past sales, nothing new I am aware of. I just sense that he has lost a good bit of confidence in the quality of banking mgt/decision making and the changed risk profiles and less clarity.