Two option strategies that have worked well for me the last year

I am not a frequent stock trader nor am I a trader of options at all. I do have what I consider large positions in stocks and I do use options as a tool to manage those positions. I tend to take big positions in a small number or stocks in one of my portfolios and in another much smaller portfolio I take small positions in more risky stocks.

One strategy that I used in my larger portfolio was to buy deep in the money calls on a stock I like that was badly beaten down last spring. Deep in the money calls have little time premium in them. The stock is NWL and I bought it before COVID at about $21 after researching the stock while Carl Icahn and Starboard Value were buy-in up the stock. It is a simple story---lots of good brands in a company that finance guys had vastly over leveraged and Ichan was determined to unwind that debt and get the balance sheet under control. Last Spring when the crap hit the fan the stock was down to $15 or $16 (it went even lower) I bought a large number of $13 Jan calls for around $2.5. I exercised those calls before the x dividend date in December and collected the December dividend. The stock was trading around $22 and is now $26 and pays a dividend that is about 3.5% at the current stock price. I now have an average cost of about $16.50 (I bought some stock too when it was cheap) so that deep in the money option purchase was huge for me. Buying deep in the money calls is a lower investment way to invest in a stock you like than buying the stock out right as the time premium is very small.

The second option strategy was in my other portfolio. I had two stocks UPWK and EGHT that ran up very quickly and I had very large gains this Spring relative to my investment that I really wanted to take but I did not want to pay the short term gains tax rate. To avoid that I needed to own both stocks until June 15. Fortunately the June options expired on the 18th so I put collars on both back in March and liquidated those positions yesterday and still have my gains even both stocks have fallen in price significantly since I put the collars in place. If you have big gains and need to hold them for tax purposes option collars are a good way to go.