On 5\/18\/20 I sold a 5 contract Naked Call on Square (SQ) with an $80 Strike Price. The Call expires on Friday 5\/22. I received a premium of $1.50. On the 5 contracts The premium was $750.<\/p>\n
I did a Naked Call because the stock received a few downgrades and I felt the stock was gonna go down. Well, the stock didn’t go down, in fact it went up above my Strike Price and I didn’t cover my Call. I felt that strongly that the stock was going down.<\/p>\n
You must understand how Naked Calls work when they expire In-the-Money<\/a><\/span>, which is what happened to me. The result is my broker delivered the 500 shares of the stock at my Strike Price of $80 to the option buyer. When your broker does this your account will be Short the 500 shares at $80. I was a little worried because the stock went above $82.<\/p>\n Today I lucked out! In an up market SQ is down. And it’s down a few bucks!<\/p>\n Since I’m short I have to buy the stock and give the 500 shares back to my broker at $80. A few minutes ago I bought the 500 shares at $78.75 and my broker paid me the $80. I made $1.25 per shares for a total of $625.<\/p>\n 5\/22\/20 – Short 500 Shares SQ @ $80.00<\/strong><\/p>\n 5\/27\/20 – Buy 500 Shares SQ @ $78.25<\/strong><\/p>\n The Call I sold on 5\/18 expired with me keeping the $750 premium and now I add the $625. The result of selling the SQ Naked Call in a gain of $1375.<\/p>\n Many Grasshoppers<\/a><\/span> don’t understand how Short Positions<\/a><\/span> work. It’s very important that you do. Please read up on the subject. If you have any question send me an email. This is a MUST!<\/p>\n Successful Trading,<\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" On 5\/18\/20 I sold a 5 contract Naked Call on Square (SQ) with an $80 Strike Price. The Call expires on Friday 5\/22. I received a premium of $1.50. On the 5 contracts The premium was $750. I did a Naked Call because the stock received a few downgrades and I felt the stock was […]<\/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-7729","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-20F","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/7729","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=7729"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/7729\/revisions"}],"predecessor-version":[{"id":7730,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/7729\/revisions\/7730"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Profit +$625<\/strong><\/h4>\n