{"id":875,"date":"2016-01-04T13:45:13","date_gmt":"2016-01-04T18:45:13","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=875"},"modified":"2016-01-04T13:45:13","modified_gmt":"2016-01-04T18:45:13","slug":"1st-trade-of-2016-gpro-naked-call","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=875","title":{"rendered":"1st Trade of 2016 – GPRO Naked Call"},"content":{"rendered":"

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I have been watching GoPro (GPRO) for about a year now. Early this summer the stock was in the $60 range. It took a huge drop as the summer progressed and continued dropping for the rest of the year. Today GPRO is at $18.65 but it’s up a little on a historical down day. It’s up $.60. I don’t think this stock will continue going up so I sold a Naked Call. Make sure you read the pages on “Naked Calls”, “Selling Call Options” and “1 Week\/1%.” When selling Naked Options it’s not imperative that you pick the direction the stock will move. At least not pick exactly where the stock will go. You have a little cushion. With GPRO at $18.65 I sold the $20 Naked Call. The stock can move down, stay the same or go up a little and I will make money. As long as it doesn’t go above $20. If it get close to $20, I’ll buy the stock to make it a Covered Call. Here is the order. Make sure you understand all parts of the order form. Read my page on “Option Order Form”, it will explain each Part.<\/p>\n

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Sell to Open 20 GPRO 1\/8\/16 $20 C @ $.26\u00a0<\/strong><\/h3>\n

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I sold 20 contracts of GPRO $20 Calls with the expiration date of 1\/8\/16 which is this coming Friday. It’s a 5 day option and I received $.26 per share. 20 contracts is 2000 shares at $.26 per share for a total premium of $520. This trade falls under one of my most used strategies, “1 Week\/1%.” You will find this page under “Philosophy, Strategy & Risk.” When selling Calls I try to get a 1% return on my money invested. When selling Naked Calls you do not invest any money because you’re not buying the stock, but I look at the price of the stock and calculate what I would invest if I did a Covered Call. The price of the stock is $18.65 so I look for an option in the option chain that will give me 1%, that would be a $.18 premium. In this case I got $.26 which is much higher than 1%. In this case on 2000 shares the investment would be $37,300 and the return is $520. If you divide 520 by 37,300 you get the rate of return. This rate of return is 1.3%. That’s for one week! If I did this every week my annual return would be 67.6%. Grasshopper, I think you are beginning to understand!<\/p>\n

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This is a Naked Call so I put a Risk Factor of 4. Make sure you read “Naked Calls”, it’s one of the riskiest trades but if you watch and buy the stock if you have to, it is a great strategy. If the stock gets close to the $20 Strike Price I will cover this Call with the buying of the stock. Make sure you check back on “Main Street beats Wall Street”<\/strong> on Friday or Saturday to see how this trade works out. You will see if I make money or I lose money.<\/p>\n

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The Options Coach<\/p>\n

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I have been watching GoPro (GPRO) for about a year now. Early this summer the stock was in the $60 range. It took a huge drop as the summer progressed and continued dropping for the rest of the year. Today GPRO is at $18.65 but it’s up a little on a historical down day. It’s […]<\/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":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-875","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-e7","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/875","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=875"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/875\/revisions"}],"predecessor-version":[{"id":876,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/875\/revisions\/876"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}