OK. The market surged some more today, and as anticipated for a while many of my call options are in-the-money, forcing me to sell quite a few shares below the current market price. I did a bit of accounting for myself to see what all this active option writing gets me. Below are some numbers.
The shares that will be assigned amount to 8.1% of portfolio. It will drive my stock AA from 76.8% down to 68.7%.
As I have to sell them below market price, the question asked is how much did I leave on the table? What if I did no option trading, and just hold? This takes some more calculations.
At this point, after all the option assignments, my performance YTD is 11.65%.
If I did no option trading, I would have all the shares, but would miss out on the option premium, not just on the shares that will be assigned but also counting all the options that expired worthless YTD and I kept the cash. My gain YTD would have been another 0.24% higher, or 11.89%.
So, my "opportunity loss" in this short-term bull market is not so bad. And it has forced me to reduce my stock AA which at its future 68.7% is not really that low.
What will be of interest for me is that in the days ahead, will I miss these hot stocks that I just sold? Will the market drop for me to be able to buy them back cheaper, or will they soar out-of-sight?
Note that I still have some of these hot stocks left. I never do a "sell-all", but these are the hot stocks that gave me the almost 12% return YTD. I love them, but do not want to be too greedy.