If you look back at my Jan 7 post. I bought 500 shares of NFLX and sold 5 contracts of Covered Calls on those shares. The 5 Call Options I sold expired on Friday, that Covered Call’s Expiration Date. Well, I still own those 500 shares so I just sold another Covered Call on the shares. On Jan 7 I received a premium of $2 and 5 minutes ago I sold another Call for another $2 premium. I sold 5 contracts of the NFLX $119 Calls with the Expiration Date of this Friday, Jan 15. Here’s the order:
Sell to Open 5 NFLX 1/15/16 $119 C @ $2
On Jan 7th I bought the stock for $119 and today I sold the $119 Calls. If the stock goes up above $119 and stays there until the Expiration Date of this Friday I will not make any money on the stock. When you sell a Covered Call you limit your upside gain on the stock up to the Strike Price. I bought the stock at $119 and my Strike Price is $119. The only profit will be the premium of $1000. That’s the $2 premium on the 500 shares. The Risk Factor is 1. This is the lowest risk trade. I already owned the stock and I sold a Call on the shares.
Any questions please email me at coachsjc@gmail.com
Steve
The Options Coach