I bought 2000 shares of Advanced Micro Devices (AMD) way back on 6/26/17 for $14.39. I’ve sold a bunch of Calls when I first purchased the shares but have done nothing lately because the stock took a big flop, all the way down to $9. For the last few months the stock has been battling back and today it hit $13.70, and it may go higher. I’ve been getting a little tired of looking at the stock in my portfolio and I’m looking to get out and put the money to work elsewhere. Today I put in an order to sell 20 Calls with the Strike Price of $14. I wanted 20¢ which would give me $400 but to get it I had to go out to next Friday, June 8th. When the stock hit $13.70 I was filled on the order.
Sell to Open 20 AMD 6/8/18 $14.00 C @ 20¢ (+$400)
Now that I sold the Call the stock is having it’s best day in a long time. As I write the stock is up to $13.90. It looks like I’ll get assigned on the stock next week. If I do I’ll take a $780 loss on the stock. It’s not a big deal. I was just gonna sell the stock at $13.60 but then I decided to sell a Call and bring in a premium and sell at a higher price with assignment. If I get assigned I get $14 for the stock which I paid $14.39 for the 39¢ loss on the 2000 shares ($780). It’s not bad because I’m bringing in a $400 premium, plus I’ve brought in a few premiums when I first got into AMD. I’ll be happy to free up the money.
Steve
The Options Coach