Play the Groupon Earnings with Covered Calls

Why waste time holding the equity when you could have commited less capital with a deep in-the-money call option which holds very little time value? This debit spread is more efficient than owning the shares. Personally, I would have just written the calls and puts uncovered and protected myself from a 7.5% move. Works for me every earnings. You would have earned a lot more than your measley 5 per cent profit (minus the current reduction in equity).

Why waste time holding the equity when you could have commited less capital with a deep in-the-money call option which holds very little time value? This debit spread is more efficient than owning the shares. Personally, I would have just written the calls and puts uncovered and protected myself from a 7.5% move. Works for me every earnings. You would have earned a lot more than your measley 5 per cent profit (minus the current reduction in equity).

Groupon shares are taking a beating today, after missing consensus estimates of .03 and posting a loss of .02.Shares are now down to $22 in after hours trading, and my breakeven point was $22.30.As it turns out, I didn't realize that the covered calls I sold actually expire this Friday the 10th, not the 17th. Which is good news. The call options I sold will likely expire un-exercised this Friday.We'll see what happens tomorrow - I don't think shares will fall too hard, because their guidance for Q1 was up. Most likely I will just hold onto the shares and continue to write covered calls on them up until the next earnings call, and bank coin along the way.