This week was a strange week. If you follow “Main Street bets Wall Street” you know I am holding stock is Facebook (FB) and Netflix (NFLX) and I’ve been playing these 2 stocks like a piano. For weeks I’ve been selling options on both companies. In fact I received a few emails asking why I’m only making deals with FB & NFLX. I answered the emails saying, #1, I’m not doing Buy-Writes where you buy stock and sell Calls at the same time. These are previously owned stock that are below the price I paid so I’m sell Calls, bringing in money while I wait for the stocks to get up above the price where I bought. #2, I’m a big believer in concentrating on a few stocks and not getting overwhelmed by watching 8 or 10 stocks and their options at once. Please read the page “Philosophy, Strategy & Risk.” you’ll see under “Focus on a Few” my philosophy on the amount of stock I watch at once. I’ve been concentrating on FB and NFLX and it’s been working out so I continues working with these stocks. Another reason for not getting involved in other companies is FB and NFLX are very high priced stocks. I’m holding 1000 shares of NFLX that I’ve been selling Calls on and 1500 shares of FB. These 2 stocks tie up a lot of cash.
I said it was a strange week because I tried to sell Calls on my 1000 shares of NFLX and I never got executed. Every day I placed an order. I didn’t want to go for a lower premium than I was looking for and I didn’t want to lower the Strike Price. I stayed very disciplined and didn’t get executed. Sometimes it happens! I’ll try again on Monday.
When it comes to FB, I sold a Call on Tuesday and received a premium of $.50. I was pretty happy because on 1500 shares it brought me a total premium of $750 and it was a shortened trade week. The market was closed today for Good Friday. I bought 1000 shares of FB on 2/3/16 for $111.50 and another 500 shares on 2/17/16 at $100.50. With the 15 contracts I sold on Tuesday, I had the Strike Price of $113. Thursday at the close, FB was at $113.05. I got assigned on all 1500 shares. If you read my post when I sold the Call with the Strike Price of $113 you saw I wanted to get assigned. I feel FB has had a great run so I wanted to get out of the stock to watch for a while. I’m happy the way this worked out.
Let’s see what the profit was. On the 1000 shares I bought at $ 111.50 and sold at $113 (the Strike Price) the profit is $1500. On the 500 shares I bought at $100.50 and sold at $113 the profit is $6250. In the last 2 months I sold a lot of Calls on the 1500 shares and brought in a lot of premium money but this week the premium I brought in was $750. This week for selling the Call and getting assigned to close the FB position the total profit is $8500.
Take a look at the page “Trade History.” Look at the amount of Calls I sold on FB with 15 contracts since I bought the stock on 2/3/16 & 2/17/16. This was a very profitable run with FB. I will watch the stock closely to see if I want to get back involved. I’m sure I will.
Weekly Total Profit $8500
Money in the Mattress
Take a look at a few links below. If you have any questions with any of the trades I made on Facebook please send me an email.
Covered Call. In this post I mentioned Buy-Write. Read about it under Covered Call.
Havs a great Easter!
Steve
The Options Coach