About 2 weeks ago I got out of 1000 shares of Snap (SNAP) with a nice profit. I was gonna hold on to those shares but it was up over $15 and I no longer liked the candlestick chart in addition to hearing some unfavorable reports.
The last few days the stock has been moving up again. Today I did a one week “Buy-Write.” I bought 1000 shares at $14.50 and sold 10 contracts of the 10/6/17 $14.50 Calls for a premium of 40¢ ($400). This is an At-the-Money option so I’m in this trade for the premium only. I’m hoping the stock continues to go up and I get assigned. A 40¢ premium on a $14.50 stock is a 2.7% gain. For a one week trade that’s incredible! I just hope the stock stays above $14.50. This trade is a Covered Call so it gets a Risk Factor 1.
Buy 1000 Shares SNAP @ $14.50
Sell to Open 10 SNAP 10/6/17 $14.50 C
I made this trade to start next week’s profit because my monthly draw ($4000) for October hit my bank today and I still had money available to trade with. I take this money each month as a salary for living expenses. I don’t like to just let my account grow. I want to enjoy life!
Steve
The Options Coach