Is Turbo Covered Call a good strategy?

@Value & Investment @SpaceM

Taking the closing data of $Tesla(TSLA.US) on November 29 as an example, the closing price is 345.

Portfolio:

- Hold 100 shares of the underlying stock

- Long 1 TSLA 250321 345 call (cost 4400)

- Short 2 TSLA 250321 410 calls (income 2080*2)

From the above portfolio, it can be seen that the options are almost break-even.

## Hold until expiration

Situation 1:

After expiration, if the stock price is below 345, all 3 options expire worthless, and the loss is calculated based on 100 shares of the underlying stock.

Situation 2:

After expiration, if the stock price is between 345-420, the 345 long call will generate a profit close to that of 100 shares of the underlying stock, while the two 420 short calls expire worthless. At this point, this bullish combination acts like it has a turbo, and combined with 100 shares of the underlying stock will generate 2 times the profit. This is the ideal situation.

Situation 3:

After expiration, if the stock price is above 420, the 345 long call will generate partial profit (420-345), while the profit above 420 is offset by one 420 short call, and the 100 shares of the underlying stock will also be exercised and sold at 420, resulting in a final profit of (420-345)*200=approximately 15,000. If Tesla's stock price is above 495 at this time, the portfolio's return will be worse than just holding 100 shares of the underlying stock, resulting in a missed opportunity.

## Timing to close the call option before expiration

This situation lacks experience, firstly because timing is difficult; if one can time it correctly, ordinary stock trading can yield 100% profit; secondly, because there are short call options involved, improper operations can pose significant risks. Therefore, this situation will not be discussed further.