We are at the height of summer vacations. There are many people away from their computer for a little while, and I’m no exception. I just returned from a little family reunion which was upstate NY in a town called Saugerties, NY. Well, I’m back to my computer and I just did some updating in Main Street beats Wall Street. And I’m looking for some trade ideas.
I just returned from an airport run, I dropped my uncle off at Newark Airport. He was in town for our family get-together. In addition to my updating I also made a trade. Before I left my home the market was down a little but Twitter (TWTR) was up about 80¢ at $42.50. I own 1000 shares at $42.90. When I bought these shares I sold a Call with a 90¢ premium. That Call expired and I wasn’t assigned. With the market’s volatility the last week and a half most stocks are down a little. TWTR was down to where I couldn’t get another Call sold with a decent premium. The stock bounced back a bit and with the stock at $42.50 I placed an order to sell a Call before I made my airport run. While I was away I was filled on that Call. The order I placed was to sell 10 TWTR Call to expire this coming Friday, 8/23. I placed the order with a 60¢ premium for $600.
Sell to Open 10 TWTR 8/23/19 $43.00 C @ 60¢ (+$600)
A 60¢ premium on a stock I bought for $42.90 gives me a 4 day return of 1.4% return. This Covered Call fits into my “1 Week/1%” strategy. This trade is a Covered Call on a stock thats moving good so I give it a Risk Factor 1. Remember, this is the second Call I sold on these shares. The first Call brought in a premium of $900. With today’s Call I brought in a total of $1500. If I get assigned I’ll make another $100 on the stock sale. That would be a total of $1600 return on a $42,900 investment in about 3 weeks. That would be 3.7% return.
Since I was away I never wrote my week ending report for last week. My trading volume has been way down with the crazy volatility, and this week I have only 1 trade to report. This was a 1 week Call I sold against my 1000 shares of Applied Materials (AMAT). The Call expired and I was not assigned because the stock stayed below my Strike Price of $50.50.
8/8/19 – Sell to Open 10 AMAT 8/16/19 $50.50 C @ 45¢ (+$450)
8/16/19 – Expired 10 AMAT 8/16/19 $50.50 C
Profit +$450
This is the second Call I sold against these shares of AMAT. The first brought is a $600 premium. As I write the stock’s at about $47. I’ll need the stock to go up another $1.50 before I can get the premium I want for the Expiration Date I want.
Total Weekly Gain +$450
I see we have a few new readers. Welcome aboard! Make sure you read my page Rate of Return. I know you’re trying to read all the pages but Rate of Return is very important. We must re-program our brains for the returns we want to work for.
I hope you’re enjoying your summer.
Steve
The Options Coach