I continue to do a lower volume of trades due to the crazy volatile in the market, plus the few stocks I’m holding are lower than where I bought in. This week I only had 1 trade come to a conclusion.
On 4/10 I sold a 10 contract Naked Call on Micron (MU). With the stock at $49.70 I sold a $51 Call. When I sold the Call I also placed a buy order at my Strike Price of $51. In the case the stock went up my account would automatically buy the 1000 shares at $51 to cover my Call. Well the stock did go up to $51 the next day and my buy order was filled. At that point I had a 10 contract Covered Call with the Strike Price of $51. The stock stayed above $51 and I was assigned on my 1000 shares. Since I bought the stock at the Strike Price I didn’t make money on the assignment. However, my premium for selling the Call was 50¢, $500 on the 1000 shares, which is in my mattress.
4/10/18 – Sell to Open 10 MU 4/13/18 $51.00 C @ 50¢ (+$500)
4/13/18 – Expired 10 MU 3/13/18 $51.00 C
Profit +$500
4/11/18 – Buy 1000 Shares MU @ $51.00
4/13/18 – Assigned 1000 Shares MU @ $51.00
Profit $0
Total Weekly Gain +$500
This week I’m going to make some Grasshopper trades. These will be 1 contract Buy-Writes. I’ll be buying 100 shares of a stock and selling a 1 contract Call. This will be a great learning tool for Grasshoppers who don’t have a large amount of money to get started. Stay tuned!
Steve
The Options Coach