{"id":11435,"date":"2021-05-19T11:33:45","date_gmt":"2021-05-19T15:33:45","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?page_id=11435"},"modified":"2021-05-19T12:14:09","modified_gmt":"2021-05-19T16:14:09","slug":"macys-grasshopper-trade","status":"publish","type":"page","link":"https:\/\/www.mainstbeatswallst.com\/?page_id=11435","title":{"rendered":"Macy’s Grasshopper Trade"},"content":{"rendered":"

Yesterday a few of the retail stocks came out with great earnings, Macy’s being one of them. Today the market is getting crushed and these retail stocks are all down. With Macy’s down I I just made a Grasshopper trade that I think will be a good learning situation.<\/p>\n

My strategy is to get assigned on my Covered Calls. I like to buy a stock, sell a Call, get assigned, and move on. Holding stocks always seem to disappoint me. Give me my few percent a week and at the end of the year I’m happy. That’s if I get assigned. If I don’t get assigned, sometimes I end up holding a stock a long time because they are down from my buy-in price. I think all investors are feeling this now.<\/p>\n

It’s very important, to me, to pick a Strike Price that will give me the best chance to get assigned. If the stock goes up I don’t worry about Opportunity Lost<\/a><\/span>. I take the premium I signed up for and move on.<\/p>\n

The last few days I made a few In-the-Money Covered Call trades. When you get assigned on an In-the-Money Covered Call you lose money on the stock sale from assignment. How much money? It’s according to how much the stock is in the money. Today I bought 200 shares of Macy’s at $18.15 and sold the $18 Call. If I get assigned at $18 I’ll lose 15\u00a2 on the stock sale. Bought the stock at $18.15 and sold at $18.<\/p>\n

If I can get a premium I like, that makes it worth giving up the 15\u00a2, I like doing In-the-Money Covered Calls. When I’m In-the-Money it gives me a better chance to get assigned. If you like to get assigned you must ask yourself, is it easier to get assigned at $18, or say $18.50, if I sold the $18.50 Call. Clearly it’s more likely to get assigned at $18.<\/p>\n

Another thing you must look at are the premiums of the $18 Call and the $18.50 Call. The $18 Call had a premium of 65\u00a2 while the $18.50 Call was at 35\u00a2. With the $18 Call I get 65\u00a2 and with assignment I give back 15\u00a2 on the stock sale for a profit of 50\u00a2. With the $18.50 Call I get the 35\u00a2 premium and a chance to sell the stock at $18.50 for another 35\u00a2 on the stock sale because I bought at$18.15. That would be a total of 70\u00a2 profit with assignment.<\/p>\n

I decided to go with the $18 Call and having a better chance of assignment.<\/p>\n

 <\/p>\n

5\/19\/21 \u2013 Buy 200 Shares M @ $18.15<\/strong><\/p>\n

5\/19\/21 \u2013 Sell to Open 2 M 5\/21\/21 $18.00 C @ 65\u00a2 (+$130)<\/strong><\/p>\n

I like the $18 Call better because it gives me a better chance at assignment. If both Calls were assigned the $18 Call gives me a profit of 50\u00a2 and the $18.50 gives me 70\u00a2. I went with the better chance of getting assigned. The 65\u00a2 premium is a return of 3.5%. If assigned I’ll give back 15\u00a2 on the stock sale for a total profit of 50\u00a2, a return of 2.75%. This 2.75% in more than enough for a 3 day trade.<\/p>\n

These are the numbers you want to learn with, 1, 2 or 3 contracts. As your account grows you will be happy with these weekly percentages. I guarantee it! If not you better invest in a gun and a mask.<\/p>\n

As I’m writing M is going up, which I thought it would because of the earnings. I just didn’t think it would happen today lol. The more it goes up, the better chance of assignment!<\/p>\n

Getting assigned in my strategy, it might not be yours. If you have any questions on my strategy send me an email.<\/p>\n

 <\/p>\n

Successful trade,<\/p>\n

Steve<\/p>\n

The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Yesterday a few of the retail stocks came out with great earnings, Macy’s being one of them. Today the market is getting crushed and these retail stocks are all down. With Macy’s down I I just made a Grasshopper trade that I think will be a good learning situation. My strategy is to get assigned […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-11435","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-2Yr","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/11435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11435"}],"version-history":[{"count":3,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/11435\/revisions"}],"predecessor-version":[{"id":11443,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/11435\/revisions\/11443"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}