I’m writing this report early in the evening because I was away from my computer for a large part of the day. As some of you might know I’m getting another shoulder surgery. Two years ago I had my right rotator cuff repaired, and at that time my doctor told me it’s common for athletes who played overhead sports to need both repaired. Well his prediction came true. I get surgery on my left shoulder this Friday.\u00a0With surgery coming soon there’s a lot of pre-op tests that kept me busy today. I even got my first COVID test.<\/p>\n
On Nov 23rd I sold a 2 contract Naked Call on Tesla that went bad. With the stock at $510 I sold 2 11\/27\/20 $530 Naked Calls. This Call gave me a premium of $2000. On Expiration Day the stock went all the way up to $585. The big question is, why did I sell a Naked Call on Tesla? Well, I did have my reasons, but even though Tesla is one of the most shorted stocks, it was a mistake.<\/p>\n
On Expiration Day, with the stock at $585 and the premium at $65, I had a decision to make. With the 2 contracts the total premium for a “Buy to Close” was $13,000. Did I want to take the $11,000 loss, or did I want to do a Roll-out? \u00a0And possibly prolong my agony!<\/p>\n
I hate to take a loss so I decided on a Roll-out. With Tesla entering the S & P on Dec 21st my directional prediction on the stock changed. I now thought the stock would continue up. I decided to buy 200 shares of the stock to cover the Rolled-out position. On the Expiration Day I bought 200 shares at $593.50.<\/p>\n
11\/27\/20 \u2013 Buy 200 Shares TSLA @ $593.50<\/strong><\/p>\n Also on 11\/27 I did the “Buy to Close” to get me out of the obligation of delivering the 200 shares at $530. Below is the “Sell to Open” and the “Buy to Close.”<\/p>\n 11\/23\/20 \u2013 Sell to Open 2 TSLA 11\/27\/20 $530.00 C @ $10.00 (+$2000)<\/strong><\/p>\n 11\/27\/20 \u2013 Buy to Close 2 TSLA 11\/27\/20 $530.00 C @ $65.00 (-13,000)<\/strong><\/p>\n At this point I own the 200 shares and I’m out of the original position, ready for the Roll-out position to prevent me from losing money.<\/p>\n At the end of the trading day on the 27th I entered an order which was selling another Call to try and bring in a premium of $65. It turned out I had to sell a Call going all the way out to March 2021. I placed the order but didn’t get filled before the close.<\/p>\n On Monday I placed another order again but did not get filled. As the stock was moving up each day I started to place the order with a $70 premium and move the Expiration Date closer to end the Roll-out sooner. I placed the order every freak’in day but was never filled.<\/p>\n Today, with the stock up big and at $625, I was finally filled. I sold 2 contracts of the Tesla 1\/15\/21 $620 Call for a premium of $70.<\/p>\n 12\/7\/20 \u2013 Sell to Open 2 TSLA 1\/15\/21 $620.00 C @ $70.00 (+$14,000)<\/strong><\/p>\n I know this is not the normal Roll-out. Normally you do the “Buy to Close” and get back in with another “Sell to Open” on the Expiration Day. It just didn’t work out that way. Being a short term options seller, there is no way I would have sold a $620 Call with the stock at $625. Especially going out to January 15th. I only made this trade to negate the loss from the original Naked Call.<\/p>\n The way it stands, on the original Naked Call, I am +$2000 with the premium. Then I did the “Buy to Close” which cost me $13,000. At this point I’m down $11,000. I now did another “Sell to Open” for a +$14,000. When this expires in January I’ll be up $3000. Also, I bought the stock at $593.50. If I get assigned at the Strike Price of $620 I’ll make $5300 on the stock sale. If I don’t get assigned, who knows where the stock will be!<\/p>\n I would rather be in this position with the Roll-out than be in the losing situation without the Roll-out.<\/p>\n As I mentioned before, I’m well aware this is not your normal Roll-out with so much time between the “Buy to Close” and the “Sell to Open.” Either way I’m bent on making this losing position a winner.<\/p>\n If you have any questions, or comments on this trade series send me an email.<\/p>\n Successful trading,<\/p>\n Steve<\/p>\n The Options Coach<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" I’m writing this report early in the evening because I was away from my computer for a large part of the day. As some of you might know I’m getting another shoulder surgery. Two years ago I had my right rotator cuff repaired, and at that time my doctor told me it’s common for athletes […]<\/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-9523","page","type-page","status-publish","hentry"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P75MP0-2tB","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/9523","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=9523"}],"version-history":[{"count":3,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/9523\/revisions"}],"predecessor-version":[{"id":9526,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/pages\/9523\/revisions\/9526"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}