VLO — Turning Losses into Productive Float

Backstory: I bought VLO at $161.00 (100 sh, total $16,100.00). After assignment, my last covered call strike was $130.00 — meaning I’d need to ladder back up toward $161.00 just to recover my original cost basis. Rolling higher strikes offered little benefit; even stretching three years out, I’d barely break even and earn almost nothing during that time.

Instead, I applied the Capital Extraction Framework: sold a deep ITM LEAP covered call at $85.00 strike and received $45.50 per share (total $4,550). That released $4,550 as float and reduced locked exposure to $11,550. Over roughly 2.2 years, the float compounded to $5,893.42 while I continued collecting $866.67 in dividends.

Assignment at an effective sale of $130.50 results in a –$3,050 realized loss (–13.20% CAGR on that leg), but when including the float growth and dividends, the combined outcome improves to –3.42% CAGR — far superior to earning nothing while “waiting to get back to even.”