I’m having a busy Monday. I just sold a Naked Call on Time Warner (TWX) for my third option sale of the day. This TWX deal is my second Naked Option today. Earlier I sold a Naked Call on U.S. Steel and now Time Warner. There are many indicators that point to the market losing a little steam and I feel these stocks I’m doing Naked Calls on might have a little pull back and I don’t want to own the stock with Covered Calls. TWX is at $72.60 and I sold the $74 Calls. I do have a little breathing room because I have a $1.40 before this Call goes In- the-Money. I sold 20 contracts of the TimeWarner 4/1/16 $74 Call at $.45. On the 20 contracts the total premium is $900. I give this trade a Risk Factor of 3. It is a Naked Call (high risK) but the stock had a big up day today (+2.75) and I don’t believe it will continue to go up after a big day. Plus the stock is at $72.60 and it hits resistance at around 73.25. I will watch this closely but I’m confident I will get out or this trade with a profit. Here’s the sell order:
Sell to Open 20 TWX 4/1/16 $74 C @ $.45 (+$900)
I have 2 companies to watch very closely this week because of Naked Calls, U.S. Steel and Time Warner.
If you have any questions on any of todays trades please email me. If I don’t get any emails I must believe I doing a great teaching job. I’m not sure that’s the case so lets have the questions.
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Steve
The Options Coach
Hi. I am just learning options trading. I find your site very informative, and am interested in getting started. I have some decent success in just trading individual stocks in the past but really just got back into it. I have a limited portfolio right now, 3K to 3500K, so I like the leverage that options can give me. I understand the concept of options, but what I am struggling with is the platforms. I am dabbling in the Think of Swim platform from TD Ameritrade, I just am spooked by what I am ‘buying” or “selling”. It’s not as clear to my minds eye as Stock XYZ goes up $1 a share.. etc. I am planning on following you more closely as at least a training tool and using their paper account function to make myself comfortable. Again thanks for your site!
Hi Thomas, Thanks for your note and thanks for reading my site. I use Streetsmart Edge by Charles Schwab and I love the platform. If you start trading options I recommend starting with 1 contract, which is 100 shares. Subscribe to “Main Street beats Wall Street” by entering your email in the subscription box on my home page and you will get every trade I make as I make it. Tomorrow is Monday and I will be making at least a trade or two. email me any questions and we’ll have you making money in no time. Coachsjc@gmail.com
Steve
The Options Coach