SOFI is good for trading but poor for covered calls due to capped upside.

And if you know of stocks that consistently pay as much as these do, you can look at a stock like SoFi. I mean, it is a fantastic stock uh to trade.

If we were to look at the, you know, let's look at the one-year chart on SoFi. Um, it has tons of premium in it as well. But look at this movement. You know, it it's 16 bucks. Right now, it's trading at $17 and the stock was at 32.

So, it was great if you were swing trading this. But if you were holding this for any amount of time, if you were holding SoFi for a very long time, um you can see it it traded sideways.

This was a this was a great time, this is a great time to be trading this, but these moves were still pretty big from $5 to $10. That's like double the stock price. Like that is is an extreme move.

Uh you know, N bucks to $32. If we're long, that's fantastic move. The problem is people don't get out of them. they don't sell them when they when the move has been so big.

So on a on a stock like SoFi when it has moved up as much as it did earlier uh or last year, this became a trade that I wasn't taking. Now that it's come down and we're playing more in a range, this is the type of stock where I might consider uh playing options against it again.

And part of the reason is because it's a similar sort of thing. If I look out just 10 days on SoFi, can I get can I get 1%? Uh let's let's look at this is not quite 1% for 10 days, but this one is.

This is 1%. Now, if I was to buy the stock for $17 and I was to collect my 1% return by selling the 18 uh 18 call, then what is my capped upside? Well, that that's an important correlation to look at because if the stock does move up, we need to make sure that we have the potential of making money.

So, how do we calculate that? Let's get the calculator out for a second. We're going to go uh it's $1,700 investment, right, to buy 100 shares. So, what is the max return? Well, the maximum I can make is going to be $120.

Where do I get that figure? Well, $20 for selling the the the call and then $100 for the appreciation from we're calling this 17 from 17 to 18. So $120 potential profit divided by my output which is going to be 1,700.

I'm just keeping these at round numbers. So we're looking at a 7% maximum.

When we looked at MEA, we're collecting 1%. We had a 20% potential return. 21% actually because it could go from $10 to $12. Whereas SoFi, in order to get this 1%, we're actually dramatically capping our our potential upside.

So, if I'm looking at deploying capital, how how much how much capital does this generate? It can easily generate the 1% a month or 1% a week or 10 days, but can it have the potential that MEA has? And and even a stock like SoFi doesn't.

Now, this is a down day, of course. You know, we're looking at this on a down day. better to sell calls on an upday obviously.