Covered CALL – Hold Strategy (Expanded Version – With Examples). This High-Priced Investing Theory! For FREE!!!

I don’t want to get into a debate here about Investors and Traders. Traders are NOT Investors, and if you want to see how successful a lot of Traders are, go over to WSB and count the number of people in 30 days who have lost every single dollar to their name. I’ll wait. Those people are Traders (they think.)

I am an Investor. I traded my way through college and I have probably bought 5 CALLS in 25 years. I do Covered CALLS and Cash Secured PUTS. But I KNOW how to trade!

I am going to clarify our Buy-and-Hold (Covered CALL Strategy) for our Wolfspeed short squeeze in just a few bullet points to show you how simple it is and why it is so logical.

And there is no way that this cannot make sense.

1. The key to ANY stock investment should be to buy and HOLD shares of stock (as long as it is a good company.)

2. On Wolfspeed, you are never again going to get these shares cheaper than what you currently own them. So, you want to buy them and hold on to them.

3. We believe that our stock is going to go up (that’s why we’re all here.) And we KNOW that if the stock does go up, that it is also going to come back down (in a short squeeze.)

4. If we know that our goal is to hang on to the cheapest shares of stock that we are ever going to own, we must have a plan to hold our shares.

5. If we sell, it is going to KILL us to buy back in at any price above the price we currently own the stock at. Why do that to ourselves? Make it a point to hold the shares you currently own. If we hold, we prevent our Hedge Funds from gaining access to our shares. We make it that much more difficult for Hedge Funds to get out, and force the stock price to go higher. Win-Win! And we are never going to get our shares cheaper than what we currently own them.

6. When the stock DOES go up, all we have to do (and this is the easy part - NOT) is to pick a point where we think the stock has "topped". At that moment, we need to pick the farthest date out (right now that is the 18 Sept, 2026) and sell CC’s as deep in the money as you can, so that you get to hold your shares.

If we think the stock is going to come back down to $100, $80 or $50, sell your CALLS at the strike just above where you think the stock will land. In a case like this, you can sell the 18 Sept, 2026 $3 Strike and it will not matter (let’s not get into the Greeks for this sexercise)!!  Sell the $3 Covered CALL.

You could easily get a $200 - $300 premium on your shares and regardless of which strike you sell, you will be able to buy those back within 5 – 10 days at an 80+% - 90+% profit on a $200 - $300 premium. And just to spell this out for you, a $200 premium on one contract is $200 x 100 = $20,000 PER contract. Folks, this is a NO BRAINER!

7. When this thing “land”, you will own a $100, or $80, or $50 stock with a cost basis of about $10 - $15 AND score the single greatest option trade of your lives….all the while, denying our Hedge Funds the opportunity to steal your shares too cheaply.

 

And while we’re at it….I am going to give you a real live example right now (For you Lazy Investors)

1. When we go “live”, if we hit $400/sh, and decide to sell a $100 CC for 18 Sept, 2026, that $100 strike is exactly 25% of the value of a $400 stock price.

2. Right now, the stock is at $16.12. 25% of the current stock price is $4.03 ($16.12 x .25 = $4.03.) This will give us a $4 strike price.

3. Right now, with a $16 stock and a $4 strike, your premium is $13.20 (there is no $4 so I split the $3 & $5 strikes to get to the $4).

4. A $13.20 premium on a $16.12 stock is an 81.88% premium ($13.20 / $16.12 = 81.88%.)

5. In our future exercise, if we sell a $100 strike CC and get an 81.88% premium on a $400 stock, that is a premium of $327.54 ($400 stock price x .8188 = $327.54)

A $327.54 option premium on one contract equals $32,754.00 PER contract ($327.54 x 100 = $32,754.00)

 You will receive $32,754 for EVERY 100 shares of Wolfspeed stock that you own.

Any of you old farts (like me) who feel like kicking in here, feel free. This would be a great opportunity for us to teach the next generation of younger Investors how the Stock Market is supposed to work!

This ain’t WSB. I can give you a fish, or I can teach you to fish…..or if I was WSB, I could throw your ass out of the boat because that would be really funny! (“F-You” r/wallstreetbets). Do you think I don’t like WSB?

And there you have it folks, I just don’t think I can make a better argument for a buy and hold strategy than that.

I want to bludgeon a few Hedge Funds!!!!

GO, GO, GO Wolfspeed!!!