{"id":9427,"date":"2020-11-30T12:15:25","date_gmt":"2020-11-30T17:15:25","guid":{"rendered":"http:\/\/www.mainstbeatswallst.com\/?p=9427"},"modified":"2020-11-30T12:15:25","modified_gmt":"2020-11-30T17:15:25","slug":"sold-10-micron-puts","status":"publish","type":"post","link":"https:\/\/www.mainstbeatswallst.com\/?p=9427","title":{"rendered":"Sold 10 Micron Puts"},"content":{"rendered":"

I have so much to report I don’t even know where to start. Plus I’m trying to get my trading in. The bottom line is, I’m gonna post everything I need to report, one position at a time. If you can keep track of all my moves you are a loyal\u00a0Main Street beats Wall Street<\/strong> follower!<\/p>\n

Because of my crazy deal with Palantir – which I’ll be writing about soon – I didn’t get my Results Week Ending 11\/27\/20<\/a><\/span> completed. One of the trades I didn’t get into in that report is my Micron trade.<\/p>\n

Last Monday I sold 10 Contracts of the MU 11\/27\/20 $64 Calls for a premium of $1 for $1000. This position was Naked. When selling a Naked Call you must deliver the stock if it closes In-the-Money. If you are Naked and the stock is closing In-the-Money you have a decision to make. In my case the stock closed at $64.23. Late on Friday I could have done a “Buy to Close” for about 25\u00a2 ($250) to get me out of the obligation of delivering the stock. I could have bought the stock so I covered the Naked Call. Or I could do nothing. If I do nothing my broker has to borrow the 1000 shares of MU and deliver the shares to the Call buyer. If the broker does this I will be Short the stock and at some point I have to buy the 1000 shares of the stock and replace the borrowed shares. This is what I did. I am now Short 1000 shares of Micron at $64. This was my strategy. The question is, why did I do this?<\/p>\n

I don’t think Mu is going much higher in the short term. I wanted to Short the stock. First I sold a Naked Call, which is a Short position. If the stock went down and closed below my Strike Price the position would have expired, I keep the premium, deal over! Since the stock closed above my Strike Price I am now Short 1000 shares of Micron. Now what do I do? Before I get into that, remember I keep the $1000 premium.<\/p>\n

I can just wait for the stock to get below $64. The more it goes down the more I make on my Short position. At some point I buy the stock to replace the borrowed shares. EX: If the stock drops to $63, I can buy the stock and replace the shares. Making $1 ($1000) on closing the Short position. When being an options trader you must understand how Short positions work.<\/p>\n

This is one way to handle the situation. This was not my strategy. Everyone knows I’m in this game for the premiums. So I brought in a premium! I just sold a 10 contract $64 Put<\/strong> for a $1.40 premium for $1400. This position, along with my Short stock position is a Covered Put<\/strong>. For Main Street beats Wall Street<\/strong> readers this is a completely new strategy. Actually, it is also new to me. This is a strategy I’m working on and I plan on doing a lot more if the opportunity presents itself; like a down market, or if I’m bearish on an individual stock. I’m not quite bearish on Micron but I’ve been in the stock many times I think I know how the stock moves, so I decided to try it out with this stock.<\/p>\n

Sell to Open 10 MU 12\/4\/20 $64.00 P @ $1.40 (+$1400)<\/strong><\/p>\n

As I’m writing, Micron started to run up a bit, lol. It’s OK. I grabbed a nice premium and I’m trying out a new strategy for a market downturn I’m expecting.<\/p>\n

When used to buying and selling Call options, getting into Puts can be very confusing. We’ll learn together! Send me an email if something isn’t clear.<\/p>\n

Watch for more posts. I have a lot to report and catch up on.<\/p>\n

Successful trading,<\/p>\n

Steve<\/p>\n

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

I have so much to report I don’t even know where to start. Plus I’m trying to get my trading in. The bottom line is, I’m gonna post everything I need to report, one position at a time. If you can keep track of all my moves you are a loyal\u00a0Main Street beats Wall Street […]<\/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-9427","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\/p75MP0-2s3","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/9427","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=9427"}],"version-history":[{"count":1,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/9427\/revisions"}],"predecessor-version":[{"id":9428,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=\/wp\/v2\/posts\/9427\/revisions\/9428"}],"wp:attachment":[{"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mainstbeatswallst.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}