Entered a 2 Contract Covered Call With Zoom

I’m really trying to curtail my trading going into the election, except, of course, selling Calls on shares I already own.

Well, I have been following Zoom (ZM) and I just got into a position I like and think is safe. The stock opened at $525. It dropped down to the $515 area then started back up. With the stock at $520 I bought 200 shares with the hope it would continue up. At some point I wanted to sell a 2 contract Call for a premium of $15.

As the stock went above $522.50 the premium was at $13.50 for that Strike Price. I placed an order to sell 2 10/30/20 $522.50 Calls for the $15 premium. The stock continued up and when the stock hit $525.50 I was filled on my order.

I like the stock, the $522.50 Strike Price, the premium, and the chance of getting assigned. If I get assigned I’ll make $500 on the stock sale and keep the $3000 premium.

Buy 200 Shares ZM @ $520.00

Sell to Open 2 ZM 10/30/20 $522.50 C @ $15.00 (+$3000)

Zoom being a COVID stock I really don’t see much risk. However, we do have an election next week. Considering this I give this Covered Call a Risk Factor 2.

With a horrible start to the week, yesterday, I’m positioning myself to have a nice week.

Successful trading,

Steve

The Options Coach