Vipshop Holdings (VIPS) is a holding company. The Company is an online discount retailer for brands in China. The Company offers branded products to consumers in China through flash sales mainly on its vip.com Website. The Company’s segment is sales, product distribution and offering of goods on its online platforms. The Company conducts its business through its subsidiaries and consolidated affiliated entities in China. Through its flash sales model, the Company sells limited quantities of discounted branded products online for limited periods of time. The Company offers diversified product offerings from over 17,000 domestic and international brands, including apparel for women, men and children, fashion goods, cosmetics, home goods and other lifestyle products.
I’m not very interested in the stock but there was a report today that the stock had unusual option activity. Along with the option activity the stock was up over 4%. I decided to take a shot with a 3 day Covered Call. I did an At-the-Money “Buy-Write” with the buying of 2000 shares at $11.48 and I sold 20 contracts of the 7/21/17 $11.50 Calls. I received a premium of 30¢ for $600. The 30¢ premium on an $11.48 stock is a 2.6% for the 3 day Call. This is a Covered Call so I give this trade a Risk Factor 1.
VIPS “Buy-Write”
7/18/17 – Buy 2000 Shares VIPS @ $11.48
7/18/17– Sell to Open 20 VIPS 7/21/17 $11.50 C @ 30¢ (+$600)
Steve
The Options Coach