A few days ago I sold 1000 shares go Inseego (INSG) with a $2700 profit. In the post reporting that trade I said I’ll be back in INSG very soon. Well, today I’m back in.
I jumped out on Monday because the market was moving down, and I was worried about where the market was going as a result of the coronavirus. I’m still worried, but the market seems to be handling it OK.
I sold the stock and now I’m back in INSG. Only I didn’t buy more stock, I bought a LEAPS. I invest less money and have a better benefit. I bought 20 contracts of the LEAPS. When purchased the premium was $2.60. The option I bought has a Delta of .62. For every $1 movement in the stock my option’s premium will go up 62¢. If I owned the 1000 shares of the stock and the stock went up $1, I would be up $1000. Since I own 20 contracts (2000 shares) with a Delta of .62, if the stock moves $1 my option’s premium will go up $1240 (.62 X 2000 shares).
When I bought the INSG LEAPS the stock was at $7.60. To buy 1000 shares I would have invest $7600. I bought 20 contracts (2000 shares) of the LEAPS at $2.60, thats $5400. A $2200 less investment with a better benefit.
Buy to Open 20 INSG 1/21/22 $10.00 C @ $2.60 ($5400)
This long option in with an up and coming stock. This option doesn’t expire until 2022. I think I’ll make some good money with this position. How much depends on how long I hold. I give this trade a Risk Factor 2.
I like this position so much I’m entering it into my Wealth Builder’s Stock Alternative Portfolio. This portfolio now holds 3 position. I entered it into my Wealth Builder because it’s an up and coming stock and is positioned nicely in 5G. They have some very innovative products. Their Hot Spot is looked at as the best on the market. They have millions of dollars in contract with some of the largest communication companies. Verizon uses their Hot Spot exclusively. I plan on being in this position for at least a year.
If you have any questions on LEAPS you know what to do…..Email me!
Successful trading,
Steve
The Options Coach