I just sold a 10 contract Call on Advanced Micro Devices (AMD) that will expire in 3 days.
I started this week looking to sell Calls on a few positions I’m holding. 1000 shares of AMD, 100 shares of RH, 100 shares of Nvidia and 100 shares of Netflix. Monday and Tuesday saw little movement in these position and I wasn’t able to get my Calls filled at my desired premiums. Today is Wednesday, and what a difference a day makes! While I was just filled on a 10 contract Call on AMD I’m still deciding what to do with RH, Nvidia and Netflix.
I placed an order to sell a Call on RH with a $1.55 premium to expire this Friday. It was just about to get filled but the stock pulled back. I still have the order in so let’s see what happens in the next few hours.
With Nvidia and Netflix I’m leaning toward not selling a Call. Both are up today and I think I might just go with the stock gain and see what happens for next week. Nvidia has been moving up the last 3 days after a little pullback so I might want to keep the stock a little longer without the risk of getting assigned. Today it’s up $1.50.
Netflix is an entirely different story. I would like to hold onto Netflix so if I sell a Call it will be with a Strike Price with little risk of getting assigned. And when you do that it’s usually a small premium, and might not be worth the risk of losing the stock. Today, as I write, Netflix is up $11. I’m very happy I didn’t sell a Call yesterday, but I was thinking about it. For now I’ll watch and see where it goes.
This morning Apple was up $10 before the opening on a huge earnings beat. They also raised their dividend. Also in the tech sector, AMD reaffirmed their positive 2019 forecast impressing analysts, and received upgrades from a least 4 brokerages which raised their price targets. AMD was up over $1.50 at the open. When it was at $28.90 I sold a 10 contract Call for a 40¢ premium. I sold the AMD 5/3/19 $29.50 Call. For some reason the stock pulled back and as I write it’s back down to $27.75. I’m very happy I got this Call sold before it dropped back. I received a $400 premium and my Call will expire this Friday.
Sell to Open 10 AMD 5/3/19 $29.50 C @ 40¢ (+$400)
This 3 day Call gives me a 1.4% return. The trade is a Covered Call so I give it a Risk Factor 1.
I have 2 Calls set to expire this Friday. 1 with Weight Watchers and todays with AMD. I won’t have huge gains with premiums this week, however, I’ll have a big increase in my account because of my stock holdings moving north. All my stock holding are not listed in “My Positions” because I’m holding them in my “Gift Account.”
I’ll let you know what happens with my RH order.
Steve
The Options Coach