{"id":5750,"date":"2019-09-17T11:35:20","date_gmt":"2019-09-17T15:35:20","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=5750"},"modified":"2019-10-03T10:53:12","modified_gmt":"2019-10-03T14:53:12","slug":"out-of-snap-position-in-a-sq-buy-write","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=5750","title":{"rendered":"Out of SNAP Put\/In a SQ Buy-Write"},"content":{"rendered":"

I thought I was pretty much done trading this week, but NO! When you\u2019re in positions you never know what\u2019s gonna happen. That\u2019s why I love this game. Like coaching basketball, it keeps me on my toes. Sometimes you think you\u2019re done for the week and opportunities open with small movements in the market.<\/p>\n

Let\u2019s see what I did today, a few minutes ago.<\/p>\n

Yesterday I started the day with the selling of a 20 contract Put on SNAP. The stock was down and I felt it was temporary. Well, thank God I was right! When the stock was down to $15.60, a little lower than it\u2019s been. I felt it was hitting support, so I decided to sell a Put. I decided on selling the Put instead of buying the stock because of my budget. I sold 20 contracts of the $15.50 Put and brought in a premium of $600, but if I bought 2000 shares of the stock I would have had to lay out $31,200. Both positions would benefit with the stock heading north. Yes, I felt strongly that the stock was going up but not strong enough to lay out the money, with the possibility of the stock going down.<\/p>\n

Today the stock is doing what I felt it would, it\u2019s up. When you sell a Put it\u2019s a Short Position<\/a><\/span>. With a Short Position, when the stock goes up your position increases in value. You must understand Short Positions! I sold the Put with a premium of 30\u00a2 which is $600 on the 20 contracts. Today the premium went down to 5\u00a2. On the 20 contracts the premium is now $100. Yesterday I sold to open the position to bring in $600, and today I bought the position back with a \u201cBuy to Close\u201d which cost me $100, for a $500 profit. And the position is closed! Selling options is a great, low risk way to bring in some nice cash.<\/p>\n

9\/16\/19 \u2013 Sell to Open 20 SNAP 9\/20\/19 $15.50 P @ 30\u00a2 (+$600)<\/strong><\/p>\n

9\/17\/19 \u2013 Buy to Close 20 SNAP 9\/20\/19 $15.50 P @ 5\u00a2 (-$100) <\/strong><\/p>\n

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

Why did I make this move? I could have held for 4 more days and kept the entire $600. Well, #1, most readers know I like to lock in profit, but today I had another reason. I saw a great opportunity for another position and I wanted to free up some margin money.<\/p>\n

The other position was a Square (SQ) Buy-Write. I watch SQ every day. It\u2019s on my watch list. It\u2019s been heading south for the last few weeks and I felt it was hitting support. I think it\u2019s going up from here. The stock was at $59.50 and I looked at the premium for the $60 Strike Price expiring this Friday, 4 days away. The premium was 88\u00a2. An 88\u00a2 premium definitely fits into my \u201c1 Week\/1%<\/a><\/span>\u201d strategy. I decided to place an order to buy 1000 shares of SQ at $59.50, along with placing an order to sell 10 contracts of the $60 Call for a 90\u00a2 premium. Within a few minutes I was filled on both.<\/p>\n

Square \u2013 Buy-Write<\/strong><\/p>\n

Buy 1000 Shares SQ @ $59.50<\/strong><\/p>\n

Sell to Open 10 SQ 9\/20\/19 $60.00 C @ 90\u00a2 (+$900)<\/strong><\/p>\n

If I get assigned, which I hope I do. I\u2019ll make $500 on the stock sale and keep the $900 premium. That\u2019s a $1400 gain in 4 days! This is a Covered Call on a great stock. This trade gets a Risk Factor 1<\/strong>.<\/p>\n

Because of my margin I would not have been able to get filled with this position if I still held the SNAP position. The bottom line is, I traded the SNAP position locking in $500, which had the potential to make another $100, for the SQ position, which has the potential to make me $1400.<\/p>\n

Now, this is a no-brainer! However, you must be near your computer to see the opportunity and pull the trigger.<\/p>\n

I have a bunch of positions working. Let\u2019s see how the week will end up. I think it will be a great week. But let\u2019s not forget the Fed speaks tomorrow!<\/p>\n

Steve<\/p>\n

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

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

I thought I was pretty much done trading this week, but NO! When you\u2019re in positions you never know what\u2019s gonna happen. That\u2019s why I love this game. Like coaching basketball, it keeps me on my toes. Sometimes you think you\u2019re done for the week and opportunities open with small movements in the market. Let\u2019s […]<\/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-5750","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\/p75MP0-1uK","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5750","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=5750"}],"version-history":[{"count":3,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5750\/revisions"}],"predecessor-version":[{"id":5843,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/5750\/revisions\/5843"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}