CC Covered Calls Buy-Write Strategy Update 7/11/2021


Here’s an update on the stock symbol CC covered calls I started on 6/23/2021. Due to recent market fluctuations, I adjusted my positions on 7/8/2021.

Here’s some background information on the stock and the covered call strategy. This is about the CC shares I bought and sold along with the CC OTM Covered Calls. The Chemours Company’s symbol is the symbol CC. This is a buy-write strategy.

Wilmington, Delaware-based The Chemours Company is a major supplier of performance chemicals that are used in a wide range of end-products and processes. Chemours began operations as a separate entity in July 2015, following its separation from E.I. du Pont de Nemours and Company (“DuPont”).

The Chemours Company’s stock has risen about 26% in the last six months. The stock price is in an uptrend channel that is rising. It benefits from increased demand for Opteon in mobile apps, as well as great cost-cutting efforts.

What Happened

On 6/23/2021, I paid $34.34 per share for CC and sold the 7/16/21 $35 call for $1.13 per call. The covered call I sold for $1.13 per call reduced the stock’s cost basis to $33.21.

On 7/8/2021, I bought back the 7/16/21 $35 call for $0.30 per call and sold the 7/16/21 $33 call for $1.15 per call, lowering the stock cost basis to $32.36. I did so since the CC stock price fell as low as $32.74 on 7/8/21. It significantly lowered profitability because the maximum profit is now $0.64 per share assuming the share price remains above $33 after 7/16/21 closing. The current ROI is 1.91 percent, or 87.14 percent annualized, compared to 5.21 percent, or 82.72 percent annualized before the adjustment.

The CC stock has recovered to the $34.50 resistance level, as shown in the daily Renko chart below. The stock was initially acquired at a price of $34.34 per share. After the adjustment, the cost basis was reduced to $32.36. Between $32.50 and $33, there is some support. The CC earnings report is not forthcoming until at least July 23rd, 2021. Given that the call expires on July 16, 2021, there is a strong likelihood that the position will be assigned on that date. This is the intended result since I don’t want to be holding the positions when the earnings reports come out.

CC 7/16/2021 covered calls a buy-write strategy updated on 7/11/2021

What’s Next

I would still like to close the positions before the expiration date of July 16, 2021. The major reason is that I don’t want to hold the shares till the earnings report is released. Furthermore, the stock has a support range of $32.5 to $33. If the stock falls below this level, the next support level is $30. That gap is huge. The risk is too great. I’d have to roll out and down the covered calls. The upkeep is not worth the effort.

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