Yesterday I reported that I did an In-the-Money Covered Call with HUYA. When the stock was at $25.17 I bought 1000 Shares and I sold 10 7\/24\/20 $25 Calls. This position was 17\u00a2 In-the-Money. This is one of the reasons I received a great premium of $1.07.<\/p>\n
I got into this position because the option activity was very high on the stock. There’s one thing you must understand, when an option is bought there is also an option sold. So, the motive behind the high option activity might have been because many people felt the stock was gonna go down.<\/p>\n
At the open today I did not like the way the stock looked. It was falling right out of the gate. I decided to place a “Stop Loss” order at $24.25. As the stock was falling my order was filled taking a $920 loss on the stock.<\/p>\n
At this point I still had the Short Call, which at this point, was Naked. A few minutes ago my $1.07 premium was down to 25\u00a2. I decided to get completely out of this ill-advised position. I did a “Buy to Close” on my Short Call with the 25\u00a2 premium. This gave me a profit on the Call of $820. I received a $1.07 premium (+$1070) and paid 25\u00a2 ($250) to close the position for a profit of $820.<\/p>\n
I lost $920 on the stock and made $820 on the premium. I am very happy to be out of this position with only a $100 loss. Below is getting in and out of the In-the-Money Covered Call<\/p>\n
HUYA – Covered Call<\/span><\/p>\n 7\/21\/20 – Buy 1000 Shares HUYA @ $25.17<\/strong><\/p>\n 7\/22\/20 – Sell 1000 Shares HUYA @ $24.25\u00a0<\/strong><\/p>\n 7\/21\/20 – Sell to Open 10 HUYA 7\/24\/20 $25.00 C @ $1.07 (+$1070)<\/strong><\/p>\n 7\/22\/20 – Buy to Close 10 HUYA 7\/24\/20 $25.00 C @ 25\u00a2 (-$250)<\/strong><\/p>\n The lesson to be learned here is be very careful when listening to the Nagarian Brothers on CNBC when they report Unusual Activity. Do your own homework! Unusual Activity can also mean people are selling option because they feel the stock is going down. If you only look at the Unusual Activity I feel it’s a 50\/50 shot. Which is not good enough!<\/p>\n Successful trading,<\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Yesterday I reported that I did an In-the-Money Covered Call with HUYA. When the stock was at $25.17 I bought 1000 Shares and I sold 10 7\/24\/20 $25 Calls. This position was 17\u00a2 In-the-Money. This is one of the reasons I received a great premium of $1.07. I got into this position because the option […]<\/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-8221","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-28B","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8221","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=8221"}],"version-history":[{"count":2,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8221\/revisions"}],"predecessor-version":[{"id":8223,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/8221\/revisions\/8223"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\u00a0Loss – $920<\/span><\/strong><\/span><\/h4>\n
Profit +$820<\/strong><\/span><\/h4>\n
\nTotal Loss -100<\/strong><\/span><\/h4>\n
\n