XME – Hello Emmaleigh. You’re right, Dan did not mention a strike price. So – I would ask you to look at the chart, and see what you think might be a good strike price for this trade. To me, XME looks to be consolidating at a higher level, now above the 200 DMA. We have seen some strength in this sector for a period of time, which is why the previous covered call position worked so well. So where to from here?
Well … I see the next level of resistance at about $48. a November covered call position will have 20 days to expiration (including today) so you could consider going long the shares, and selling either the $48 call or the $49 call against that position. It all depends on what you perceive as the likelihood of this pushing through the next level of resistance, or perhaps hitting it and bouncing back down, or consolidating further.
XME Nov covered calls- DAN mentioned doing the same trade for Nov that we did for Oct. what strike price should we use for Nov? I am a newbie
XME – Hello Emmaleigh. You’re right, Dan did not mention a strike price. So – I would ask you to look at the chart, and see what you think might be a good strike price for this trade. To me, XME looks to be consolidating at a higher level, now above the 200 DMA. We have seen some strength in this sector for a period of time, which is why the previous covered call position worked so well. So where to from here?
Well … I see the next level of resistance at about $48. a November covered call position will have 20 days to expiration (including today) so you could consider going long the shares, and selling either the $48 call or the $49 call against that position. It all depends on what you perceive as the likelihood of this pushing through the next level of resistance, or perhaps hitting it and bouncing back down, or consolidating further.