I own 2000 shares of Facebook (FB). 1000 I bought on 4/5/16 @ $113. The other 1000 I bought on 5/11/16 @ $119.90. On the first 1000 shares I just sold a Covered Call. I’ve been selling Call since I bought the shares and have been bringing in some nice premiums. FB has been lying low lately. It’s been moving between $116 and $118. Today the stock hit $117.45 and I sold the $118 Strike Price Calls on the 1000 shares I got at $113. I really wanted to sell the $120’s on the entire 2000 shares but couldn’t get a good premium without going out a few weeks. I sold 10 contracts of the 5/27/16 $118 Calls for a premium of $.55 ($550). This trade has a Risk Factor of 1. It’s a Covered Call on previously owned stock and the stock is almost $5 above where I bought. I wanted $120 but this is a great situation whether I get assigned or not. Here’s the sell order:
Sell to Open 10 FB5/27/16 $118 C @ $.55 (+$550)
I put in an order to sell a Call on the other 1000 shares but didn’t get executed yet. I’m look for a $.50 premium on a $120 Call to expire Friday June 3rd (next Friday).
Take a look at today’s “Message of the Day.” I talk a little about my preference to Naked Call above Covered Calls.
Any questions, please email me!
Steve
The Options Coach