I was executed on the sale of 15 contracts of Facebook (FB) 2 minutes ago. I sold 15 contracts of the 3/25/16 $113 and I received a premium of $.50. On 15 contracts the total premium is $750. I give this trade a Risk Factor of 1. This is a Covered Call on a previously owned stock and I don’t care if I get assigned or not. In this case I am leaning toward wanting to get assigned. I will explain below. Here’s the sell order:
Sell to Open 15 FB 3/25/16 $113 C @ $.50 (+$750)
I bought 1000 shares of FB a while ago at $111.50 and 500 shares at $100.50. Above I said I’m leaning toward the desire of getting assigned on these shares. The market had a great run in the last few weeks and I’m feeling like I might want out of FB for a little while. I’ve been playing FB for a while and I see other opportunities I like. If I get assigned on these shares it will free up some cash to pursue other opportunities. If I don’t get assigned, no big deal! If there’s a little pull back I’ll wait it out and continue to sell calls. If I don’t get assigned and there is no pull back, better yet. I went with a $113 Strike Price which is only $1 out of the money because I’m leaning toward assignment and this is a shortened trading week because the market is closed for Good Friday. If I get assigned at $113 I make $1.50 on the 1000 shares and $12.50 on the 500 shares, plus the premium of $750. I will be watching closely to see where this goes.
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Steve
The Options Coach