Moves With Paypal and More
On 1/4/22 I bought 500 shares of Paypal (PYPL) at $189.50. I sold a $190 Call to expire 1/7/22 which was not assigned. This Call gave me a premium of $1250.
Yesterday, with the stock on the move, I sold another $190 Call to expire this Friday, 1/14/22. The stock ended up $8 on the day.
I really try to know my stocks and learn how they move by keeping an eye on it every day. Some are very unpredictable but PYPL I notice a big up day is followed by a down day. No matter how the market moves. This has been going on for a while.
Yesterday with the stock up about $9.50 and near it’s high for the day I made a ballsy move. With my PYPL shares involved in a $190 Covered Call I sold my shares at $192.25. The selling of my stock left me in a Naked Call $2.50 In-the-Money. This is very dangerous. However, I felt so confident that PYPL would continue with its pattern of going down after a big up day so I decided to take the gamble.
Remember, I’m in the stock at $189.50. I sold the stock at $192.25 making $1375 on the sale but I’m now in a Naked Call. Now I need the stock to move down so I can re-buy the stock to cover my dangerous Naked Call. Lucky for me my prediction came through. On the big up day for the market PYPL moved down. I bought the 500 shares at $187.50 and my $190 Call is covered again. Below are the orders for the buying and selling of the stock.
1/4/22 – Buy 500 Shares PYPL @ $189.50
1/11/22 – Sell 500 Shares PYPL @ $192.25
Profit +$1375
With the selling of the stock I locked in a profit of $1375. With the stock moving down I bought the shares back at $187.50 and I’m in a Covered Call again. Below is the position I’m in now. This Call expires this Friday.
1/12/22 – Buy 500 Shares PYPL @ $187.50
1/11/22 – Sell to Open 5 PYPL 1/14/22 $190.00 C @ $2.00 (+$1000)
Try not to get involved in too many positions. If you only hold a few you can get a feel of how the stocks move. I don’t recommend anyone making the move I made today but it’s always nice to be able to predict how a stock might move.
I made a few more moves today. I own 200 shares of Tesla and I sold a Call to expire Friday.
Sell to Open 2 TSLA 1/14/22 $1175.00 C @ $2.00 (+$400)
I own 1000 shares of Nvidia and with the up day I got a Call sold against these shares.
Sell to Open 10 NVDA 1/14/22 $300.00 C @ 50¢ (+$500)
These aren’t the biggest premiums but with the big down day yesterday I’m happy I got to bring in some okay money.
I also made a Day Trade with GM. With the stock moving down today I decided to sell a Naked Call. I didn’t want to own the stock. With the stock at $60.09 I sold a $60 Call to expire Friday. I sold 5 GM 1/14/22 $60 Calls for a premium of 81¢ for $405. As the stock continued down I placed a “Buy to Close” order at 40¢. When selling Calls with a Day Trade I love to get half the money I signed up for. The stock dropped down to the $59.65 area and my 40¢ was filled.
Sell to Open 5 GM 1/14/22 $60.00 C @ 81¢ (+$405)
Buy to Close 5 GM 1/14/22 $60.00 C @ 40¢ (-$200)
Profit +$205
Any questions on these moves send me an email.
Successful trading,
Steve
The Options Coach