I’m still very bearish on this market, and absent of a vaccine I cannot see why it would go up. There could be days the market will react to the government making stimulation moves, but I don’t see it doing much in the long run. I see millions hitting the unemployment lines in the coming weeks and this will not be good.
Main Street beats Wall Street is a learning site. I’m sure some of you are dabbling in the market but hopefully you’re not diving in because you see low priced stocks. We all have to make our own decision with our money, and no one will care more about your money than you! But I’m asking you to be careful! Me, I’m not getting in yet unless I have to cover a Naked Call. Even with a Naked Call I’m willing to let it go In-the-Money a bit. With the volatility I feel it will drop below the Strike Price again. You know selling Naked Calls is my favorite strategy. There’s nothing like bringing in large premiums with never having to buy the stock. No investment! Free Cash! It’s not for everyone, but right now it’s for me. If I get into trouble with the stock In-the-Money at Expiration I’ll will do a Roll-Out. This doesn’t mean I won’t Cover but I’ll watch closely and make a decision if it gets hairy. With the big premiums it gives me a little breathing room.
I just sold Naked Calls with Apple (AAPL) and Microsoft (MSFT). All my Short position expired on Friday. I had a huge payday and I freed up a ton of margin. Read Results Week Ending 3/20/20.
With AAPL at $223.50 I sold 5 contracts of the 3/27/20, $225 Calls for a crazy premium of $10. On the 5 contracts I brought in $5000.
Sell to Open 5 AAPL 3/27/20 $225.00 C @ $10.00 (+$5000)
This is a Naked Call on a great stock with crazy volatility, this trades gets a Risk Factor 5. This is a very dangerous trade! However, I do not have much confidence this market is going up. At least not up and staying up. As I write AAPL is at $118 and change.
Now for MSFT. With the stock at $139 I sold 10 contracts of the MSFT 3/27/20 $140 Calls for a premium of $5. This brought me in another $5000. This is also a Naked Call. Very Dangerous! This trade also get a Risk Factor 5. As I write the stock is at $136 and change.
Sell to Open 10 MSFT 3/27/20 $140.00 C @ $5.00 (+$5000)
The problem with these trades is I have to be glued to my computer. But, I guess I have nothing else to do lol. If I do have to leave my computer for any length of time I’ll place a “Buy-Stop Order” at my Strike Price. This will execute a trade buying the shares to cover the Naked Calls. Which wouldn’t be the worse thing. These are 2 great stock. They will come back if I buy and the stock goes down. I would rather not cover, but if I have to I will. This is why it very important to do these trades with very good stocks.
It these trades work the way I feel they will I’ll bring is $10,000 in premiums this week. I still have money available but I might be done for the week. However, if the stocks go down while I’m Naked I might jump out making some profit and jump back in with the market fluctuations. Watch for that!
Successful Trading,
Steve
The Options Coach