I would like to start this post with wishing everyone a Happy Memorial Day! There are many holidays here in America, however they are not all celebrated by every single American. Memorial Day is one that absolutely should be celebrated by every person who lives on American soil. We all know that this is not the case! Just watch some of Bernie’s people stomping on the flag. I long for the day when every single American home flies “Old Glory” on American holidays. As I was hanging my flag this morning I thought of all my family members and friends that served. I thought of all the men and women who came home in a box draped with this country’s beautiful flag. I thought of all who never came home or are buried on foreign land. This day means so, so much! And we have so much to be thankful for. I will memorialize these very special Americans in my own way. You might not see me today in Coney Island, at the BBQ or the bar, but if you do, you will know I’m giving thanks and remembering the sacrifice so many made, by the flag on my home or the tear on my cheek. May God bless the men and women who served and may God bless America. NEVER FORGET! Fly the flag!
I had a couple of positions that ended this week which made it a pretty good week. These positions involved Yelp and Facebook. Let’s go over one at a time.
Yelp (YELP)
I had 2 Naked Call on YELP expiring Friday. One was a $25 Call and the other was a $25.50 Call. YELP went up a little this week. I was waiting for a pullback but it didn’t happen yet. In fact it went up a little to keep it above both Strike Prices. The $25 Call was a little too much In-the-Money, so I couldn’t buy my way out at a profit so I did a Roll Out. You can look at my “Active Trades” to see the change of position to a Strike Price of $26 and an Expiration Date of 6/17/16.
As for the $25.50 Strike Price I was able to exit the position with a profit. A small profit but a profit! I sold 10 contracts of the $25.50 Call and received a premium of $.45 ($450). On Friday even with the stock up a little the premium was down to $.37 because of Time Decay. I decided to buy my way out and move on. I brought in for $450 with the sale and bought my way out for $370 for an $80 profit. Not much but I didn’t lose money. I Happy! Here’s the 2 orders:
Sell to Open 10 YELP 5/27/16 $25.50 C @ $.45 (+$450)
Buy to Close 10 YELP 5/27/16 $25.50 C @ $.37 (-$370)
Total Profit +$80
Facebook (FB)
On 4/5/16 I bought 1000 shares of FB at $113 and on 5/24/16 I sold 10 contracts of the $118 Calls to expire Friday the 27th. I brought in a premium of $.55 ($550). Friday the stock closed at $119.38. Here’s the order to sell the Call:
Sell to Open 10 FB 5/27/16 $118 C @ $.55 (+$550)
Since the stock went up above the stock price I was assigned at $118 and I keep the premium of $550, which is the amount the buyer paid to have the right to buy my stock.
Expired 10 FB 5/27/16 $118 C
Total Profit +$550
With the stock going above the Strike Price and me being assigned I had an “Opportunity Lost.” Please read the link. I do not care about the Opportunity Lost! I am in this game for the premium and if I can make a profit on the stock, better yet! If I worry about the Opportunity Lost I’ll never sell Calls. My strategy is don’t worry about Opportunity Lost. The book will say I crazy but I go with my disciplined, long term strategy. Here’s the stock buy and sell orders:
Buy 1000 shares FB @ $113
Assigned on 1000 shares FB @ 118
Total Profit $5000
I’ll take the Opportunity Lost and move on. I freed up a lot of money to do something else this week.
Total Weekly Profit +$5630
Enjoy Memorial Day!
Steve
The Options Coach