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Space – SPCE – Poor Mans Covered Call

Portfolio

Want to become an Astronaut?

Virgin Galactic Holdings Inc is a United States-based vertically-integrated aerospace company pioneering human spaceflight for private individuals and researchers, as well as a manufacturer of advanced air and space vehicles.

Click Here for the Gurufocus Summary of Virgin Galactic

Virgin-Galactica-JAN22-Investing-with-Chris-Jackson-Poor-Mans-Covered-Calls
Virgin-Galactica-JAN22-Investing-with-Chris-Jackson-Poor-Mans-Covered-Calls
Aerospace Industry

About This Stock Option Strategy

As the implied volatility runs around 100% it seems like the demand and volume is generally around the 30-45 day time frame. Seeing that Virgin Galactic (SPCE) is aiming to be the first civilian flight company to reach out space, I am seeing a huge outcome in the future. 

Specifically I looked out at around the 500-600 day time frame for any long call setup, and usually look at around the .80 Delta and pay no more than 50% of the contract compared to the actual position. Meaning if I were to just be able to buy 100 or more shares of the stock itself. Thus, the contract should never be equal to for the same price as just buying shares of. This makes it easier to sell contracts 30-45 days, and in hopes to pay the long contract off before expiration. 

For this company however, you will be paying around 70% for the price of the shares, versus my normal rule of no more than 50%.

  • https://www.virgingalactic.com

Position Opened

8 MAY 20

LONG CALL Strike

15

Contract Expiration

21 Jan 22

Return on Investment

10%+ / Mo.

implied volatility

98% ±
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