On 10/12/16 I bought 1000 shares of Gopro (GPRO). These shares I bought at $14.47. Back on 7/15/16 I sold 50 contracts of a GPRO Naked Call LEAP with a Strike Price of $15. These Calls will expire on 1/20/17. On 10/12/16 it looked to me like GPRO was going to start moving up. With the stock at $14.47 and my Strike Price at $15, I decided to cover this Call. Here is where I made my mistake. With a 50 contract Call sold I only bought 1000 shares. I was thinking I only had a 10 contract Call sold. When I noticed this mistake I said to myself “I have to but 4000 more shares before the stock goes above the $15 Strike Price.” With the stock moving up a little every day, today I decided to correct this mistake and buy the 4000 shares. These shares, in addition to the shares I bought on 10/12/16 gives me the 5000 shares needed to cover my 50 contract Call. I’m glad I spotted this mistake and I feel better now that I have a Covered Call on a stock getting close to my Strike Price. Here’s the buy order for the 4000 shares:
Buy 4000 shares GPRO @ $14.75
In my “Active Positions” I have the 2 buy orders listed. 1 for 1000 shares at $14.47 and 1 for 4000 shares at $14.75. I have the 5000 shares at an average price of $14.69.
I’m sorry for the confusion. I need to be more careful!
Steve
The Options Coach