Week 36 - Investment Moves

Why do I roll Covered calls? Let's follow a covered call trade from several weeks ago:

Closed V Sep 30 $275 (RED highlight)
Open V Oct 18 $280 (Blue Highlight). For a net of $38 (the diff between the cost to close and the premium for the opening of Oct 18).
on Sept 3 Closed Oct 18 for $280 (blue highlight)
on Sept 3 Opened Nov 15 for $285 (Orange highlight) for $131.
I will now limit my upside to $285 from $275 before Aug 29 (the RED highlight). So, I would gain up to $ 1,000 if my Visa stayed above $285.
I collected $38 plus $131 = $169 (in total) using the option to LIMIT my gains.
If Visa stays under $285, I keep my shares. If my Visa stays between $275 and $285, the best outcome happened for me.
If Visa go under $275, I would have lost money without the option. So the option PREMIUM only helps offset the PAIN by $169 in CASH I collected so far. As a stockholder, this is why adding the OPTION on the TOP of an asset helps reduce some of the risk of just holding the STOCK.

This week's passive income:

Most of it comes in today. I will wait until tomorrow to see if I want to do any selling and buying from some of the proceeds.

Have a profitable day!