{"id":4892,"date":"2019-04-01T12:05:28","date_gmt":"2019-04-01T16:05:28","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=4892"},"modified":"2019-04-01T12:05:34","modified_gmt":"2019-04-01T16:05:34","slug":"bought-a-rare-call","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=4892","title":{"rendered":"Bought a Rare Call"},"content":{"rendered":"

Most of you Main Street beats Wall Street<\/strong> readers know I do not buy too many Calls. I’m a Call Seller! My strategy is to bring in premiums and take advantage of Time Decay<\/a><\/span>, not be a victim of it! It is a fact that 80% of all Calls bought expire worthless. I’ve bought many Calls in my trading days and made a lot of money, quick! However, I also lost a lot of money in my “getting my feet wet” days. When I was excited about getting “rich quick” as opposed to “slow and steady\/steady and slow,” which is my strategy today.<\/p>\n

From time to time I see a good opportunity to buy an option. As I preach many times, the options market is a great place to make money, and knowing & understanding all the strategies is very important. Buying options and understanding Time value,<\/a><\/span> Time Decay, Intrinsic Value, In-the-Money<\/a><\/span>, At-the-Money, Out-of-the-Money etc. are all very important, and prerequisite to making any option trade.<\/p>\n

Once you understand all areas of options trading you will come across many situations where you might apply a specific strategy, even if it’s not one you practice on a daily basics. Today I did just that.<\/p>\n

I own 500 shares of Cree (CREE). Today I sold a 5 contract Covered Call. I did this on a stock I feel can go up a bit. I own the stock at $57.70 and I sold the $58 Call. Selling Calls and bringing in premiums is my main strategy. So, today I did my strategy even though I feel the stock can go up higher. The bottom line is you never know what a stock might do. Today it’s up but tomorrow it can tank.<\/p>\n

Today my feeling of this stock moving up was strong. After I sold the Call the stock was fluctuating. When it was down a little I decided to buy a 5 contract Call on Cree so if the stock went up above my Strike Price I would be able to get some profit which would be limited with the selling of my $58 Call.<\/p>\n

When buying Calls I like to go out a little on the Strike Price to protect a little against Time Decay<\/strong>. I also bought an In-the-Money Call. The stock was in the $57.50 area and I used the Strike Price of $55.<\/p>\n

I bought 5 Cree 5\/17\/19 $55 Calls for $4.70. The Call was a little expensive because I went out to May 17th, there was some Time Value<\/strong> I paid for, and since it was an In-the-Money<\/strong> Call I had Intrinsic Value<\/strong> I was paying for. I know for the normal Main Street beats Wall Street reader<\/strong> who have been concentrating on selling Call, buying Calls is a whole different animal. You must understand it all if you want to be an options trader.<\/p>\n

Because of the amount of Calls that expire worthless, when buying Calls I’m very careful. And not greedy! When I bought the call for $4.70 I put in a sell order at a Strike Price where I would be happy with the profit. I put the sell order in at $5.70. If filled I would make $1 on my 5 contracts for $500. It turns out the stock moved more than I thought and I was filled on my sell order quickly. As I write the stock is still moving. It’s up to $58.95. I’m out but if I was still in I would be up a few more bucks. I can’t worry about that; I’m up $500 and I’m out! I still have my Call sold and it looks like I’ll be delivering my 500 shares at $58 this coming Friday. Below are the orders for the buying and selling of the Call.<\/p>\n

\u00a0<\/p>\n

Buy to Open 5 CREE 5\/17\/19 $55.00 C @ $4.70<\/h4>\n

Sell to Close 5 CREE 5\/17\/19 $55.00 C @ $5.70<\/h4>\n

Profit +$500<\/span><\/h4>\n

\u00a0<\/p>\n

The stock is still going up but I took my $500 and put it in my mattress!<\/p>\n

If you have any questions on this move or buying options send me an email.<\/p>\n

\u00a0<\/p>\n

Steve<\/p>\n

The Options Coach<\/em><\/p>\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Most of you Main Street beats Wall Street readers know I do not buy too many Calls. I’m a Call Seller! My strategy is to bring in premiums and take advantage of Time Decay, not be a victim of it! It is a fact that 80% of all Calls bought expire worthless. I’ve bought many […]<\/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-4892","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\/p75MP0-1gU","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/4892","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=4892"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/4892\/revisions"}],"predecessor-version":[{"id":4893,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/4892\/revisions\/4893"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}