Sold 3 Call with MU, AMD and SNAP
When I buy Call options I go out a few months with the Expiration Date. I pay a little more for the option but I get a lot of time protection. One of the problems with this strategy is if the stock makes a nice move I’m torn between holding because I have a lot of time left on the contract and selling to take profit. After being an options trader for many years I know all too well that after a nice run, many times, a stock will take a dip. And we all know you will never go broke by taking profits.
I used this “discipline” strategy on 3 of my long options that have plenty of time until expiration.
Yesterday I had to be away from my computer for most of the afternoon and Micron (MU) was up on the day and up about $4 from when I bought my option. I bought the option on 3/4/24 with the premium at $9.40. My goal was to sell for $11.75, which would be a gain of 25%. When I left my office I placed a sell order at $12. When I got home I saw I was filled.
3/4/24 – Buy to Open 2 MU 6/21 24 $95.00 C @ $9.40
3/8/24 -Sell to Close 2 MU 6/21 24 $95.00 C @ $12.00
Profit +$520
It turns out I could have made more because the stock is up again today. You should never count on getting into a position at the low price and getting out at the high. I’m very happy with my profit of $520 in 4 days. This is a return of 27.6%.
Today with AMD up I decided to take profit. I bought this option on 3/1/24 for a premium of $24.70. Today the stock is up and it has been a very hot stock. I decided to lock in some profit. I placed a sell order at $34.70 and I was filled. This gave me a $1000 profit in 7 days. My goal was to make a 25% return but I ended up with a return of 40.4%.
3/1/24 – Buy to Open 1 AMD 6/21/24 $200.00 C @ $24.70
3/8/24 – Sell to Close 1 AMD 6/21/24 $200.00 C @ $34.70
Profit $1000
This one might bother some people because the stock is still running. The stock is up another $6 from where I exited the option. O’well.
I’ll be in both MU and AMD again soon with a higher Strike Price. They are both hot stocks!
Last week I also entered an option position with SNAP. I like the way the chart looked for a bounce back after dropping after earnings. I’m not crazy about this stock so I didn’t plan on staying in long, but again I went out to June with the Expiration Date for protection. I bought the position with the premium at $1.28. My goal was to get out at $1.60 which would have been a nice gain with my 5 contracts. Today the stock is up and I placed my sell order at $2.15 and I was filled.
3/1/24 – Buy to Open 5 SNAP 6/21/24 $12.00 C @ $1.28
3/8/24 – Sell to Close 5 SNAP 6/21/24 $12.00 C @ $2.15
Profit +$435
Getting out at $2.15 gave me a nice return. My gain is $435 and the return is 68%.
I’ll be watching closely to see if I get an opportunity to get back into MU and AMD.
It’s turning out to be another pretty nice week.
Let me know if you have any questions.
Successful trading,
Steve
The Options Coach