We hold a 500-share tracking position with a cost basis that has been reduced by profit-taking to 129.46. With TLT closing fast on the 142.50 target shown, it’s a good time to think about hedging our position ahead of a likely consolidation period. Accordingly, I’ll suggest the following covered-write strategy: With TLT trading 142.30 or higher, sell a single July 22 142 weekly call for each round lot you hold. I estimate that the calls will be trading for around 2.00-2.10 if the 142.50 target is reach by Wednesday, but we can adjust our offer for the calls on-the-fly. Stay tuned to the chat room for further guidance in real time. _______ UPDATE (July 5, 1:21 p.m. EDT): TLT opened sharply higher on a gap, spiking the 142 calls to a so-far high of 2.19. I’ll used 2.00 as the price for our covered write. For now, bid 0.80 to cover the calls, good till Friday. If the order fills, that would lower our cost basis to 128.36.
