{"id":2096,"date":"2016-09-21T11:47:49","date_gmt":"2016-09-21T15:47:49","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=2096"},"modified":"2016-09-21T11:47:49","modified_gmt":"2016-09-21T15:47:49","slug":"10-yelp-covered-calls","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=2096","title":{"rendered":"10 YELP Covered Calls"},"content":{"rendered":"

Today at 2pm the Fed will announce if they will raise interest rates now or wait until December’s meeting. I believe an increase is coming but I don’t think it will be today. You must remember it can be today and a trader must think how they want to play the market with big new imminent. I do own stock so I want to get some upside if the market goes up after the announcement but I also want a little protection if the Fed raises rates and the market takes a big dip. All my stock holdings do have Calls sold again for insurance accept 1000 shares of YELP. These 1000 shares I purchased for $39.35 and with the stock at $37.85 I just sold 10 contracts of the 11\/18\/16 $40 Calls for a premium of $2.30 (+$2300). I like this deal! It is a 2 month option but I’m getting 6% on my money invested. That’s a nice Rate of Return<\/a><\/span>! This Call gives me $2300 of insurance plus with the stock at $37.85, the $40 Strike Price gives me room to make some upside if the market goes up. Since this is a Call sold on previously owned stock I give this trade a Risk Factor<\/strong> of 1. Here’s the sell order:<\/p>\n

Sell to Open 10 YELP 11\/18\/16 $40 C @ $2.30 (+$2300)<\/strong><\/h4>\n

 <\/p>\n

I’m working on another page which will be a Grasshopper<\/a><\/span> trading page. On this page I’ll have trades that will be good for a beginner with not much money in their account. I know some people get discouraged when they see the amount involved in some of my trades. This new page will list trades a Grasshopper can make with a smaller account. A trade like the one I just made might end up on that page. If you had an account of $40,000 you would be able to make this trade. With YELP at $37.85, 1000 shares would cost $37,850. You could do what I just did. Buy the stock and sell 10 contracts and bring in a $2300 premium for a 6% Rate of Return in 2 months. Plus, if the stock hits the Strike Price by Expiration Day you make the capital gain on the stock. If you get assigned you would make $2.15 on the stock. On 1000 shares that’s $2150. If this happens you make $2150 on the stock and $2300 on the premium for a total of $4450. Now it’s almost an12% return in 2 months. This is the type of deals a Grasshopper must find. This is the type of deal I look for. If you only have an account of $20,000, you can do this deal for 500 shares and bring in a premium in of $1150 and you still have a 6% return. On assignment the stock gain is $1075. Stock gain plus premium is $2225 for the 12% gain. This is something to get excited about!<\/p>\n

 <\/p>\n

 <\/p>\n

Steve<\/p>\n

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

Today at 2pm the Fed will announce if they will raise interest rates now or wait until December’s meeting. I believe an increase is coming but I don’t think it will be today. You must remember it can be today and a trader must think how they want to play the market with big new […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-2096","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75MP0-xO","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/2096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"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=2096"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/2096\/revisions"}],"predecessor-version":[{"id":2097,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/2096\/revisions\/2097"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}