What a wild busy week of a lot of trades. While I had a good week I did have one bad trade. Well, it’s wasn’t a bad trade, I just made a big mistake. I have so many trades to report so please read my last post on this bad trade at “Buy to Close” Weight Watchers Calls. This way I don’t have to write the story again.
Let’s get into my Micron (MU) trades. I started the week with 3000 shares of MU. 1000 was covering my last leg of my “Triple Play Hedge,” and 2000 I had because I covered the 1st and 2nd leg of the “Triple Play Hedge” because the stock was moving up last week but than backed off so I wasn’t assigned. These 2000 shares I bought (1000) at $30.75 and (1000) at $30.91. I sold $31 Calls on these shares and was assigned. Below are the trades and profits.
Buy 1000 Shares MU @ $30.75
Assigned 1000 Shares MU @ $31
Profit +$250
Buy 1000 Shares MU @ $30.91
Assigned 1000 Shares MU @ $31
Profit +$90
Sell to Open 20 MU 6/23/17 $31 C @ 50¢ (+$1000)
Expired 20 MU 6/23/17 $31 C
Profit +$1000
With Advanced Micro Devices (AMD) I had 2000 shares from last week’s Covered Call where I wasn’t assigned. I did another Covered Call this week with a $12 Strike Price and a total premium of $600. I was assigned.
Buy 2000 Shares AMD @ $11.98
Assigned 2000 Shares AMD @ $12
Profit +$40
Sell to Open 20 AMD 6/23/17 $12 C @ 30¢ (+$600)
Expired 20 AMD 6/23/17 $12.00 C
Profit +$600
Please read about my Weight Watchers trade from the link above. It was a big loss from a big mistake. This will be a great learning trade for you. This trade shows the danger of Naked Calls.
Sell to Open 20 WTW 6/23/17 $30 C @ 60¢ (+$1200)
Buy to Close 20 WTW 6/23/17 $30 C @ $2.30 (-$4600)
Loss -$3400
This Sketchers (SKX) trade was the last leg of the “Triple Play Hedge.” The Call expired and I was assigned. PERFECT!
Sell to Open 10 SKX 6/23/17 $28 C @ 55¢ (+$550)
Expired 10 SKX 6/23/17 $28 C
Profit +$550
1000 Shares SKX @ $27.95
Assigned 1000 Shares SKX @ $28
Profit +$50
The last leg brought in $550 and the assignment of the stock only $50 but it was a very successful “Triple Play Hedge.” The entire Trade brought in $1550 on 1000 shares of the stock. The Rate of Return was 5.5% in less than 3 weeks.
Next I had the 3rd leg of the Micron (MU) “Triple Play Hedge.” This expired and I was assigned on the shares.
Buy 1000 Shares MU @ $29.85
Assigned 1000 Shares MU @ $31
Profit +$1150
Sell to Open 10 MU 6/23/17 $31 C @ 90¢ (+$900)
Expired 10 MU 6/23/17 $31 C
Profit +$900
The expiration also ended this “Triple Play Hedge.” This was also a very successful trade. All Calls expired and I was assigned on the shares. This is exactly what I want! This “Triple Play Hedge” brought in a total of $3650. What made this one so great was I made $1150 on the stock alone. This group of trades was only for 11 days. If you remember, I had the first 2 legs expiring the first week. The Rate of Return was 12.2% in less than 2 weeks. FANTASTIC!
I get a lot of banter from friends about the name of this Strategy, and they can bust my chops all they want, but I love this strategy!
For my last trade of the week I did a “Buy-Write” with U S Steel (X). I bought the stock at $21 and I sold the Call At-the-Money. I didn’t make anything on the stock because I sold for the same as I bought. This was the plan. I will only include the order for the expired Call.
Sell to Open 20 X 6/23/17 $21 C @ 52¢ (+$1040)
Expired 20 X 6/23/17 $21 C
Profit +$1040
What a busy week! It would have been a great week if I didn’t make a huge mistake with WTW. This trade gave me a loss of $3400. Even with that loss I am still up $2270 on the week. It was a good week but it could have been a great one. Hey, these things happen. I just have to forget about it and move on. However, I must learn from my mistake. Please read the the post from that trade at “Buy to close” Weight Watchers Calls and hopefully you will learn from my mistake so you don’t have to make it. That’s what Main Street beats Wall Street is all about. I want to help prevent you from losing money.
Total Weekly Gain +$2270
Have a great weekend!
Steve
The Options Coach