Fundamentals:
UP Fintech Holding Limited is an leading online brokerage firm focusing on global Chinese investors. The Company’s trading platform enables investors to trade in equities and other financial instruments on multiple exchanges around the world. The Company's customers are Chinese investors living in and outside China.
This stock was chosen:
1. 20M stocks options traded with high stock volume.
2. Price range was $20-$25. This is an important piece of information. I want to make $100+ for each $2k-$2.5K in capital to maximize my results.
Structuring the deal:
2/3/2021
I sold (1) put and picked up $105.
I bought (100) shares and sold (1) covered call $320.
I re-invested all the premium money back into the stock for more shares.
Trade note: The stock price opened up +$3 and closed up +$3. This is a very telling sign that despite rising IV the stock could gap up and blow past my $25 strike price (for the covered call).
2/4/21
Price shot up +$4 at the opening bell blowing past my cover call. I knew this was a possibility given the super strong close. I want to point out that rising IV means an extreme move is coming (not which direction). Most of the time, that move breaks to the downside. However, given how strong the previous close was this explosive move pushed upwards.
Decision point:
A. I could rolled the covered call and give up my premium
B. Sell another covered call, which is 1/3 premium of a covered call.
C. Buy another (100) shares and sell another covered call.
My actions: I purchased another (100) shares and sold another covered call for $320.
Continuing with the trade: If tomorrow this stock goes up another $3, I will repeat. I want to collect as many premiums as possible over the next 15 days. In total, I collected ($105, $320, $320) and reinvested $745 back into TIGR stock. My DTE is 15 days.
Strategy notes: When I remove most of my investment capital from this trade, I want to be left with (100) shares for monthly income.