I started the week off a little aggressively. At the open Netflix (NFLX) was down about a dollar but quickly reversed and went up a dollar. I’ve watched NFLX a long time, and, time and time again I watched this stock go up only to go back down. I’m a little concerned about the market doing much this week, at least early in the week because the Fed is in a meeting until Wednesday. Well, the meeting is Monday and Tuesday and I guess the results of the meeting will be announced Tuesday evening or Wednesday. I’m expecting the market will move a little sideways until the results of the meeting. Some speculate the Fed will raise interest rates. What will the market do after the meeting is anyones guess. While NFLX was up at $98.80 I sold 10 contracts of the $101Calls expiring this Friday. I don’t like to make a trade at the opening on Monday but I felt it was a good opportunity with NFLX to get a nice premium. I got $1.50 for a total of $1500 on the 10 contracts. After the Fed meeting NFLX could go up but I got in these shares at $97.95 and if I get assigned I will sell the stock at $101. I would make $3.05 ($3050) on the stock plus the $1500 premium. I have no problem putting $4550 in my mattress. I give the trade a Risk Factor of 1. It is a Covered Call on a previously owned stock. Here’s the sell order:
Sell to Open 10 NFLX 3/18/16 $101 C @ $1.50 (+$1500)
Let’s keep a eye on NFLX today for a possible early exit on this position.
Steve
The Options Coach