Subject: Re: Earnings Preview
If the central expectation is that the stock will be flat or even down going forwards after its tremendous run-up this last year (that run-up is why the holding is now a large percentage), could one strategy be to sell covered calls to make up the expected flat or downturn.

Sure. Whether it makes sense to you might depend a lot on your tax position. If it's a taxable account, you may be hesitant to liquidate shares that you intend to hold long term?

If you pick puts that are at high enough strikes that your shares are unlikely to be called away, it's probably not worthwhile. That's because you really want to pick the deal that is equally attractive to you whether the shares are called away or not. The simple reason is that the market will give you whichever outcome looks worst for you on the specific day of expiry.

I was in a similar situation with DG recently. I had a big position and it looked like the rally might be running out of steam so I sold some calls against some of the position. Weighted average net exit price including call premium $157 and change, current price is $142, so at the moment it looks like I'll have gained having done it. Emphasis on "at the moment". I didn't simply sell the stock as I think it will actually be higher in a year, so I was really on the fence and the calls seemed like a suitable wishy-washy solution.

On the other hand, there is much to be said for simplicity. Just sell some. Cash could come in handy some day, you never know.

On your specific example:
For example, the current 20Mar2026 GOOGL 330 CALL is trading at 15.30/15.45, which essentially "sells" the shares at 330. You can keep rolling them up and out if you are wrong, and if the price goes down or flat, you pocket the time premium (currently the whole of it).
If my calculations are correct, that is about 5% return for 60 day holding.

I would think of that as "selling" the shares at $345. That's the amount of cash you get on exercise date, plus the premium you got up front. I can't think of any reason to be sad about lightening up at any price that represents (say) more than 10 times sales on the date of exit.

I tend to pick slightly longer dated calls, simply because the premium is higher in absolute terms, but it's a matter of taste.

To your comment about being able to roll them: it isn't quite t rue. It is more true for longer dated ones than shorter ones. You *might* be able to roll them--odds are high for so long as the options have time premium that the counterparty could realize at the bid--but you might not be able to, for the simple reason that they could in theory exercise at any time.


Jim