Just bought 10 Square (SQ) Calls.
I like the payment sector. I own 10 PayPal Calls and I just bought 10 Square Call. As normally, I bought a Call with an Expiration Date that goes out a bit. The Call I bought today will not expire until next June. I don’t plan on holding this Call that long but I might hold a few months. I bought 10 SQ 6/19/20 $65 Calls for a premium of $8.75.
Buy to Open 10 SQ 6/19/20 $65.00 C @ $8.75 ($8750)
As I wrote before, when I buy Calls I like to have protection against Time Decay so I buy a longer contract. I do pay more for a longer contract but I think is worth the protection. It’s a little cost for some insurance. The Delta on this Call is .55 which means with every $1 move in the stock my Call will go up 55¢. Buying a 10 contract (1000 shares) option with a Delta of .55 is like owning 500 shares of the stock. The big difference is I paid $8750, and if I want to buy 500 shares at $63.10, which is where the stock was when I bought the Call, I would pay $31,550. I have the same benefit as owning 500 shares for only $8750. This is the power of buying options.
If buying options, BE CAREFUL!
Steve
The Options Coach