The Wall Street bloodbath continues! This is the worst start to a new year in a long, long time. Just yesterday toward the close the market was down as much as 500 points. After the last 2 week, this is crazy! This was probably not the best time to start a new blog. But if you want to learn how to trade options you might as well see how I’m going to handle myself on the rockiest of roads. I am determined to teach this game without losing money. I have been bringing in a nice amount of premiums and I had a nice week this week. I do still own 2 stocks which are down from where I bought them but I’m not worried. You can see them on my “Active Trades” list. NFLX I’m not worried about at all. As long as the market starts to level off a little. It’s a great mover! GPRO is a little different story. I have a strategy I’m hoping to put into play early this week. If the market gets a bounce watch for the trades I make while these 2 stocks recover.
I did make a bunch of trades this week and the results were good. The money’s in the mattress.
#1 – I started of the week on Monday, Jan 11th selling a Naked call on Netflix (NFLX). On 20 contracts (2000 shares) I brought in a premium of $1.75 for a total of $3500. When I sold the Naked Call the stock started going up. When I sold the Call the stock was at $113 and the Strike Price was $115. The stock went up and I bought the 2000 shares at $115 to cover my Call. At this time I have a Covered Call with the Strike Price of $115 to expire on Friday the 15th. Yesterday on expiration day the stock went down below. The result of the trade is I keep the stock and the Call expired so I keep the $3500 premium. This deal is over and I have the stock to sell another Call next week.
Profit $3500
#2 – Monday, Jan 11th with Facebook at $97.70 I sold 10 contracts (1000 shares) of the $99.50 Strike Price Naked Calls for $1.05 for a total of $1050. As I sold the Call, the stock started going down. The premium went all the way down to $.65. In 20 minutes I bought back my Call for $.65 for a total of $650. I sold for $1050 and I bought for $650 for a total 20 profit of $400. This deal is over! When you sell a Naked Call I believe in taking profit when ever you can to end the deal. You never know when the stock will start going up. If it does you might have to buy the stock to cover your Call. I try to avoid this if I can.
Profit $400
#3 – Monday, Jan 11th I sold 5 contracts of the $119 Strike Price on NFLX with the expiration date of Friday the 15th. This is the second Call I sold on the same 500 shares. I sold a Call on the same 500 shares last week but the shares were not assigned so I sold another Call. This time the stock was at $119 and I sold the $119 Strike price for a premium of $2, a total of $1000. In a few hours the stock took a little dip and I bought back the Call at $.70. On the 500 shares it’s $350. I sold for $1000 and bought back for $350 for a 3 hour profit of $650. Deal over! Money in the mattress!
Profit $650
#4 – Monday, Jan 11th some bad news came out on Under Armour (UA). The stock was at $69.20 and I sold 10 contracts of the $70 Naked Calls. I received a premium of $1.10 for $1100. Again, a few hours later the stock went down and I bought back my Call at $.70 for $700. I sold for $1100 and bought back for $700 for a total 4 hour profit of $400. Deal over!
Profit $400
#5 – Monday, Jan 11 I bought 1000 shares of Facebook (FB) for $96.36. I bought the stock to do a Covered Call, which I did. I bought the stock, sold the Covered Call then I sold the stock to make it a Naked Call. The option will be the next trade I review but the stock I bought for $96.36 and sold 3 days lated for $97. On the 1000 shares that’s a Profit of $640. In this type of market I grab what I can. Deal over!
Profit $640
#6 – Tuesday, Jan 12th I sold 10 contracts of FB for the premium of $1.15 with the expiration date Jan 15th. This brought in $1150. This Calls were sold against the 1000 shares I bought on Monday, Jan 11th. I held these Calls until yesterday and they expired worthless. I keep the entire premium of $1150. Not bad for 3 days! Deal over!
Profit $1150
With a very bad week in the market I did pretty good. I cannot complain! I brought in a total of $6740 in premiums. This is the power of options. Whoever only owned stocks this week took a bath. With options you can stay ahead of the game. On weeks where the market moves well I’ll even do better. Yes I do own 2 stocks that are lower than where I bought them but stay tuned and see how I sell options on these stocks and be in the plus column. If the market collapses, well owning stock I’ll be in the same boat as everyone else. In that case only time will fix the problem. Let’s hope Oil goes up a little this week and the market will follow.
Total Weekly Profit $6740
“Money in the Mattress”
Continue reading to understand all trades. Any questions email me at Coachsjc@gmail.com
Enjoy the 3 day weekend.
Steve
The Options Coach