February Expiration
Today is the expiration of our three remaining February covered call positions. I will dive deeper into each below, but the headline of sorts is that we will simply let the expiration process play out and we will not address these positions today.
Let’s begin with our Gap (GPS) covered call. Initially, we bought the stock for 20.35 and sold the February 20 call for $1.42.
Today the stock is trading at 20, or right at the strike price that we sold. My plan is to simply let this position play itself out. If GPS closes above 20 today, we will walk away with a nice $107 profit, or a yield of 5.65%. If GPS closes below 20 today, the call we sold will expire worthless and then next week I will need to decide if we sell a new call, or simply sell our stock.
Moving on to Flex (FLEX). Last month we bought stock at 22 and sold the February 22 call for $1.
Today the stock is trading at 28. My plan is to simply let this position play itself out. If FLEX closes above 22 today (very likely), we will walk away with a nice $100 profit, or a yield of 4.76%.
Finally, here are the details on Taiwan Semiconductor (TSM). Last month we bought the stock at 113.25 and sold the February 114 call for $2.75.
Today the stock is trading at 128. My plan is to simply let this position play itself out. If TSM closes above 114 today (very likely), we will walk away with a nice $350 profit, or a yield of 3.16%.
