I'm in an odd position.

I've written a few highish strike calls, since I think the prices we've seen in the last few months aren't the lowest we'll ever see in future.
But I've also written a pinch of low strike puts, to get a re-entry on my "underweight" position size. I am a bit cash heavy.

Since I also have an underlying long position, it appears I've ended up with a "covered short strangle".
An imprecise summary:
If the stock remains in a specific range, I gradually make income from time value on both the puts and the calls. Those are the pennies. They add to the rate of interest I'm getting on my cash.
If the stock price tanks, I'll get some stock put to me, using some of my cash pile. That's the steamroller, but actually an outcome I desire at that net entry price.
My upside is limited for the duration.

In short, the stock price has been range bound and net flat for four months, and I'm easily bored.

Jim

Berkshire Hathaway FAQ

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