This was another fantastic week! This makes 3 in a row with huge weekly profits.
This was a great week, however, not as good as last week. I made more money this week, $5850 to last week’s $3150, but I like the way last week ended better. Last week I traded 3 Covered Calls and was assigned on all 3. This week I traded 3 Covered Calls and was not assigned on any. For me, as a swing trader, I like to get assigned. Many “buy and hold” traders don’t want to get assigned. They like to keep their stock, not getting assigned, and bring in premiums as extra income. We all have trading styles with our own strategies and philosophies. I like to buy the stock, sell a Call, make money on my stock assignment according to the Strike Price I pick, and keep the premium. When I get assigned, that deal is over! And it gives me the funds back into my account to find another deal that might be better for that week. With my strategy I sell weekly options, not longer term options. I like weekly options because when selling Calls I have Time Decay on my side. I want the premium to decay down to $0 and expire worthless. Of course this is only with Short Positions. Selling Calls are Short positions.
Let’s take a look at this weeks trades. If I sold 3 Calls last week and was assigned, and sold 3 Calls this week, and was not assigned, how did I make more money this week when last week I kept the premiums and sold the stock for profit? Well, this week I had 2 additional trade. 1 of the additional trade made me $3000. This larger extra trade with Micron is why this week’s profit was much more. The other additional trade was a $500 profit with Snap.
On 7/18 I bought 10 Calls on Micron (MU). I paid a $7.50 premium to own these Calls. On the 10 contracts I laid our $7500. This week, on Monday, I sold these Calls for $10.50. On the 10 contracts this sale brought in $10,500 for a $3000 profit. This trade ended this week so it goes on this week’s results.
7/18/19 – Buy to Open 10 MU 6/19/20 $45.00 C @ $7.50 ($7500)
9/16/19 – Sell to Close 10 MU 6/19/20 $45.00 C @ $10.50 ($10,500)
Profit $3000
Before I get into the 3 Covered Call there was 1 more trade I made. On Monday, 9/16, with Snap having a down day, I sold a PUT. Snap has been hanging around the $16 to $16.50 area. On Monday the stock went down to $15.60. When I saw Snap hitting support I picked a Strike Price a little lower, $15.50, and sold a 20 contract Put. I felt very strongly that Snap was gonna reverse and start moving up. Because of my strong feeling I went with 20 contracts instead of 10. I received a 30¢ premium, but the next day with the stock moving up, the premium went down to 5¢. With 4 days until expiration I decided to buy my way out of the position for the 5¢ and use the money for another trade. If I left the money tied up for the next 4 days I would have only made another 5¢, which is $100 on the 20 contracts. I received a $600 premium and gave back $100 for a $500 profit, in 1 day.
9/16/19 – Sell to Open 20 SNAP 9/20/19 $15.50 P @ 30¢ (+$600)
9/17/19 – Buy to Close 20 SNAP 9/20/19 $15.50 P @ 5¢ (-$100)
Profit +$500
Now we have the 3 Covered Calls I traded. On all the trades I bought the stock and sold the Calls. As I mentioned, I was not assigned on any on these stocks. I still own them. They’re down a little from where I bought in, but hopefully I’ll be able to get Calls sold on Monday. With the volatile market you never know.
Below are the Call I sold which all expired and I kept the premiums.
Advanced MicroDevices
9/16/19 – Sell to Open 10 AMD 9/20/19 $31.00 C @ 60¢ (+$600)
9/20/19 – Expired 10 AMD 9/20/19 $31.00 C
Profit +$600
Dish Network
9/16/19 – Sell to Open 10 DISH 9/20/19 $36.00 C @ 85¢ (+$850)
9/20/19 – Expired 10 DISH 9/20/19 $36.00 C
Profit +$850
Square
9/17/19 – Sell to Open 10 SQ 9/20/19 $60.00 C @ 90¢ (+$900)
9/20/19 – Expired 10 SQ 9/20/19 $60.00 C
Profit +$900
Total Weekly Gain +$5850
This coming week I don’t see having a great week. To make money I have to sell Calls against AMD, DISH and SQ. All are below where I bought in. If Monday is a big up day and these 3 stock get back up to where I can get a decent premium, I’ll have a nice week. If the stock stay where they are I might have to sell Calls for a lower premium and have a less profitable week. We’ll just have to watch and see how the presidential tweets go.
Steve
The Options Coach