To The Moon

📈 How I Generate 3.5% in 17 Days with Vistra Corp. (VST) Using Options

As part of my income-generating strategy, I currently hold 100 shares of Vistra Corp. (VST), which is priced at $157.75. To maximize returns on this position, I implement a combination of covered calls and cash-secured puts, aiming for consistent short-term profits.

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🛡️ Covered Call Strategy

I sell covered call options against my 100 VST shares. For this cycle, I selected a $170 strike price call option that expires in 17 days. The premium collected from this call is approximately $5.00, which equates to a 3.17% return on my current holding price of $157.75:

\frac{5}{157.75} \approx 3.17\%

This strategy allows me to generate income while slightly capping my upside. If the stock exceeds $170 by expiration, my shares will be called away, locking in a capital gain in addition to the premium collected.

⸻$Vistra Energy Corp.(VST)$  

🧲 Selling a Cash-Secured Put

To further boost returns, I also sell a cash-secured put with a $125 strike price, collecting a $0.63 premium for the same 17-day expiration period. This represents an additional 0.5% return on the strike price:

\frac{0.63}{125} = 0.504\%

Should the stock fall below $125, I may be assigned and required to purchase another 100 shares of VST at that price — which I am comfortable with, given the significant discount to the current price.

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📊 Calculating My Total Return

Combining both option premiums — $5.00 from the call and $0.63 from the put — I generate a total of $5.63 in premium income over 17 days. When calculated against the capital tied up in my stock position alone, that represents an approximate 3.57% return:

\frac{5.63}{157.75} \approx 3.57\%

If I consider the total capital exposure — including the $12,500 in cash reserved to secure the put — the return is approximately 1.99% over 17 days:

\frac{5.63}{157.75 + 125} \approx 1.99\%

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🔍 Final Thoughts

This approach offers me a way to generate consistent short-term income while maintaining exposure to a strong stock like VST. I am comfortable with the risk of having my shares called away at $170 and with potentially acquiring more shares at $125 if the stock dips. By using options in this manner, I can enhance returns on my portfolio while managing risk with clear price targets.

This 17-day cycle alone offers me a 3.5% return on capital deployed, which, if repeated, can compound meaningfully over time. It’s a disciplined, income-focused way I put my capital to work in today’s market.

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@TigerStars @Daily_Discussion @CaptainTiger @MillionaireTiger