Grasshopper Weekly Report
This is the Grasshopper trades weekly results for week ending 1/15/21.
I started “The Grasshopper Field” at the start of 2021, two weeks ago. I’m really concentrating on making trades that new traders, or traders with smaller accounts, can learn from and afford to make. In the first two weeks I’ve gotten many comments from readers who are enjoying the new section. Our subscribers are growing and our visitors and views are going up.
I operate Main Street beats Wall Street, and do my private teaching to help you make money. Also, I want to help prevent you from losing money. Believe it or not, you help me make money. I look at my trading, Main Street beats Wall Street and my teaching as my “Business Trinity.” I don’t think I’d be as successful if I didn’t do all three. I get asked many times, “why do you do this for free?” Now you know! Besides helping you, I’m helping me! I’ve been trading for a long time, but my success grew exponentially with Main Street beats Wall Street. Not only financially, also as a person.
Let’s talk about Assignment. Everyone must develop their own philosophy on whether they want to be assigned on your Covered Calls or not. Loyal readers know I want to get assigned, at least most of the time. There are times I’d rather not get assigned, and I’ll pick my Strike Price accordingly. There are many books that preach, do whatever you can to not lose your stock. I go against this philosophy and strategy.
A little story on strategy. My son, Stephen Jr., one of our contributing writers, went to a seminar with the Najarian brothers from CNBC. The seminar was very crowded. The Najarians teach buying options, short term options. Something I refuse to do or teach. The seminar included group lunches, dinners and social time together. Steve said he spoke to many of the students, most have been involved in options for a while. He told me not one of the students ever sold an option. Everyone taking this seminar also took others, and everyone was only buying options. I found this unbelievable! And shameful. The people running these seminars are getting rich from fees and teaching new traders to lose money. If you are a new trader and you’re buying short term options you will lose your money! I’m getting rich selling short term options to people buying them. My point is everyone has a different strategy and philosophy. The same with assignment. You must develop your philosophy on assignment and have a strategy that works with that philosophy.
This week I made a bunch of Grasshopper Trades. Three of them expired, however, none were assigned. This happens! The markets didn’t have a great week and many stocks were lower at the end of the week than the beginning. You must understand the markets don’t only move up. In my main trading account I was only assigned on 2 of many Covered Calls. This would make many traders happy. The ones who want to keep their stock.
Let’s take a look at my Grasshopper Trades that expired.
NIO
I bought 100 shares of NIO at $63.75. I sold a $65 Call. The stock closed at $56.27. It was not a good week for the electric car makers. It started off good but late in the week they went down. This happens, and if you want to be a trader you better develop a tolerance for stock fluctuation. Of course we hope for the stock to pop back up on Tuesday (market closed Monday) and we sell another Call. If not, we have a decision to make. Do we want to sell another 1 week Call for a smaller premium, or do we want to sell a Call with an Expiration Date that goes out a few weeks for a better premium? If the stock stays down some might buy another 100 shares, lower the cost basis, and sell a Call with a lower Strike Price.
Lets see what happens on Tuesday and you will seed what I do. Either way I keep the $200 premium from the Call that expired. And I still own the stock to sell another Call.
1/12/21 – Sell to Open 1 NIO 1/15/21 C @ $2.00 (+$200)
1/15/21 – Expired 1 NIO 1/15/21 $65.00 C
Profit +$200
Workhorse
I bought 100 shares at $25 and sold a $25.50 Call. The stock closed at $23.34 so I was not assigned. I just looked up the premium for next Friday. The $25 is going for 71¢ and the $25.50 for 62¢. A little pop on Tuesday and I’ll get another nice premium. This week’s was 3%.
1/13/21 – Sell to Open 1 WKHS 1/15/21 $25.50 C @ 75¢ (+$75)
1/15/21 – Expired 1 WKHS 1/15/21 $25.50 C
Profit +$75
Palantir
I was filled on buying 100 shares of Palantir while driving home from Boston. I paid $25.95. On Friday morning I sold a 1 day Call and received a 51¢ premium, which is a 1.9% return on my investment. The stock closed at $25.64. I shouldn’t have trouble getting another Call sold Tuesday morning.
1/15/21 – Sell to Open 1 PLTR 1/15/21 $28.00 C @ 51¢ (+$51)
1/15/21 – Expired 1 PLTR 1/15/21 $28.00 C
Profit +$51
Grasshopper Trades Weekly Gain +$326
This is not a bad week and we learned a few things. And we will continue to learn with these positions that were not assigned.
-We must develop a philosophy on assignment.
-We must develop a tolerance for price fluctuation.
-You must learn to find your own trades. Don’t mimic me or anyone else.
-We’re starting to learn what to do when not assigned.
Continue studying, your education is never done. Watch for my Results Week Ending 1/15/21. I had another great week.
Successful trading,
Steve
The Options Coach