I bought 400 shares of MOMO on 3\/25 at $15.25 per share. The stock dropped back a little so I was selling Call with Expiration Dates out a few weeks to get a premium I like. I just had a Call expire this past Friday for a return of 2.3% for a 3 week contract.<\/p>\n
With the shares available for another Call to be sold I was just filled on another 4 contract Call for another 2.3% premium. I sold 4 MOMO 6\/18\/21 $16 Calls for another 35\u00a2 premium for $140.<\/p>\n
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Sell to Open 4 MOMO 6\/18\/21 $16.00 C @ 35\u00a2 (+$140)<\/strong><\/p>\n A 2.3% return on a 1 month trade is not the greatest but when your stock drops you must find a way to bring money in and not just stay idle. I’ll be writing about the problem of a stock dropping with a Covered Call. Hopefully I’ll get that post out this week.<\/p>\n I also made a Grasshopper trade with Nikola (NKLA). On 3\/1 I bought 100 shares of NKLA at $18.80. NKLA is another stock that dropped. Today the stock is in the $14 area. With NKLA I took a different approach than MOMO. With MOMO I went out a month to get a premium I liked. With NKLA I took a chance and dropped the Strike Price. I’m in the stock at $18.80 and I sold the $15.50 Call. This puts me in a situation that if I get assigned I’ll lose money on the stock sale. I did this because I feel the stock will not get to $15.50 by this Friday. I will watch closely. If the stock gets to my Strike Price I’ll make a decision if I want to get assigned on these shares or buy another 100 shares to deliver on assignment.<\/p>\n <\/p>\n Sell to Open 1 NKLA 5\/21\/21 $15.50 C @ 25\u00a2 (+$25)<\/strong><\/p>\n This $25 doesn’t seem like much but it is a 1.3% return for a 4 day trade. This fits into my “1 Week\/1%<\/a><\/span>” strategy. If you bought the stock today to make a trade like this your return would be in the area of 3.5%. According to the price you paid for the stock and the Strike Price you used.<\/p>\n
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