{"id":5622,"date":"2019-09-04T12:42:56","date_gmt":"2019-09-04T16:42:56","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=5622"},"modified":"2019-10-03T10:04:02","modified_gmt":"2019-10-03T14:04:02","slug":"sold-to-close-an-amat-call","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=5622","title":{"rendered":"Sold to Close an AMAT Call"},"content":{"rendered":"

I just did a \u201cSell to Close\u201d on a position I bought with Applied Materials (AMAT).<\/p>\n

Last week on Tuesday, 8\/27, I bought an option on AMAT. I also previously owned 1000 shares of the stock at $50.40. The stock was on a dip and was down to the $45 area. Even with the market volatility I felt the stock was gonna bounce back. I bought 10 contracts of this option for $5.97. I laid out $5970. This option had a Strike Price of $45 and it wasn\u2019t to expire until 6\/19\/20, next June.<\/p>\n

It\u2019s very important to understand that when I buy an option I go with a much longer contract. When I sell options I go with a much shorter contract. When I buy I don\u2019t want to worry about Time Decay<\/a><\/span> and when I sell options I want Time Decay on my side. When trading options you must understand the concept of Time Decay.<\/strong><\/p>\n

8\/27\/19 \u2013 Buy to Open 10 AMAT 6\/19\/20 $45.00 C @ $5.97 ($5970)<\/strong><\/p>\n

9\/4\/19 \u2013 Sell to Close 10 AMAT 6\/19\/20 $45.00 C @ $8.18 ($8180)<\/strong><\/p>\n

Profit +$2210<\/strong><\/span><\/h4>\n

I didn\u2019t think I was gonna sell this option for a few weeks because of the time I had; all the way to June. However, I decided to stick with my strategy of taking profit when I can. The chances are, if I held, I would have made more money, but you never know. Especially with today\u2019s volatile market environment. I grabbed a $2210 profit on a $5970 investment, and that\u2019s in 1 week! Thats a 37% Rate of Return<\/a><\/span>. I\u2019ll take it and stick it in my mattress!<\/p>\n

\n

When I went to do the writing of this trade and listing it with my \u201cclosed Positions\u201d I noticed I never reported getting into this position. I think I was away from my computer when I was filled and I forgot to sent out a post. In staying with my \u201ccompletely transparent\u201d rule I snapped a picture of my 2 trade notices from my broker and put them below. If you click on the picture it will become larger. The \u201csettlement date\u201d is always the day after the trade. Notice the \u201csettlement date on today\u2019s trade, it\u2019s 9\/5\/19, tomorrow.<\/p>\n

Getting in the position<\/strong><\/p>\n

\"\"<\/a><\/p>\n

Getting out of the position<\/strong><\/p>\n

\"\"<\/a><\/p>\n

If you are a loyal Main Street beats Wall Street<\/strong> reader you know I\u2019m not much of an options buyer. If you want to be an option\u2019s trader you must know how to make all types of trades. When you see a good opportunity you know what to do. This is what I did here. However, you must remember, with buying options 80% of options bought expire worthless. Meaning, option traders who buy options lose their entire investment 80% of the time. You must understand this. If you are a Grasshopper<\/a> <\/span>learn by selling options, not buying.<\/p>\n

If you have any questions please send me an email.<\/p>\n

Steve<\/p>\n

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

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

I just did a \u201cSell to Close\u201d on a position I bought with Applied Materials (AMAT). Last week on Tuesday, 8\/27, I bought an option on AMAT. I also previously owned 1000 shares of the stock at $50.40. The stock was on a dip and was down to the $45 area. Even with the market […]<\/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-5622","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\/p75MP0-1sG","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5622","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=5622"}],"version-history":[{"count":2,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5622\/revisions"}],"predecessor-version":[{"id":5828,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5622\/revisions\/5828"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}