100 shares of $CEG at $288 basis - low delta CCs while accumulating, or wait?
I was doing research on the energy sector and where the bottlenecks are for the next years. Constellation was the one I liked most, so I bought 100 shares on friday at $288. Not the greatest buy since it closed later on at $285 but oh well.
Why this one? Well, in my opinion the data center power demand is actually showing up in signed contracts and are guiding for 20%+ base EPS growth through 2029. Stock is down around 31% from the highs.
A director also bought about $418k of stock in august, which was the only insider buy in two years. That seems like a good thing for me.
What I don't like is that It's not cheap...but so is most of the stuff on the market and I'm trying to break that belief and still somehow earn money by adjusting to this situation.
In short, I'm paying up now for cash that shows up in a few years and if it doesnt go well for some reason then the red numbers would be a common thing for me for some time. (wouldn't be the first time - covid times).
My plan here:
This is 100 shares, which is roughly 10% of my account. I plan to cap $CEG up to 30%.
Earnings are around 50 days out so my usual strategy is low delta covered calls for the next two ish weeks, then keep maybe building with higher delta CSPs (1-3). About 20 days before earnings I'll look at how IV looks and maybe buy calls (longer dated ones) or even a leap. If not that, then I'd sell a csp due to higher IV with earnings for sure.
The three CC ideas in the picture are all 6 DTE, sorted highest to lowest delta. I'm leaning to the last one, $297.50 for $1.55, because I don't want to cap this thing yet that much.
The best scenario is that this company keeps getting contracts now, appreciates in value and then I \*sell a LEAP call\* at some price I'd be okay selling at my holding anyway. The worst one is that my premium earned from selling calls and puts that went into a long dated call (if I even place it) just goes to nothing. But anyway I'll be left owning a good company.
What are your thoughts about the thesis/stock in general or the strategy approach itself?
