This market is as crazy as ever! Yesterday, Friday was as bad as any. I did make a trade this week but I might end up regretting it. I’ve been staying away from trading because of the way the market has been but I guess it’s in my blood.<\/p>\n
Facebook (FB) came out with unprecedented earnings so I decided to get involved. I did a Covered Call in hopes the stock would continue up a little. I wanted the premium plus make a little on the stock. On Wednesday I bought 1000 shares of the stock at $111.50. When I bought the stock it was moving so well I didn’t get the Call sold until the stock was up around $113. I sold 10 contracts of the 3 day $114 Calls and got a premium of $1, for a total of $1000. The way the market has been moving I wanted the stock to continue up and get assigned at $114. I didn’t want to hold the stock. It actually looked like the stock would blow through the 114 mark and I would have an “Opportunity Lost.” Well yesterday throw a monkey-wrench into my hopes. Yesterday the market went down big…again! And FB went down over 6 points. The good news is I keep the $1000 premium. The bad news is I now hold FB stock at $104.<\/p>\n
This is a very common scenario these days. I might add, if I have to hold a stock it might as well be one of the hottest stocks.<\/p>\n
Some people don’t understand why I say the biggest risk with Covered Calls is the stock going down and not the Opportunity Lost; this is why!<\/p>\n
I’m hoping for a big up day on Monday so I can sell another Call on FB. Here’s the closing of my FB Call:<\/p>\n
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Total Profit +$1000<\/strong><\/p>\n \n Make sure you understand:<\/p>\n