Grasshopper Trade with NIO, Ten Contract Covered Call with Cree

I’m not in the best situation with these 2 trades. Both are well below my buy-in price. The NASDAQ sell-off hurt a bunch of my positions, so I have to do the best I can do while I wait for them to bounce back up.

With NIO I bought back on 1/11 at $63.75. I brought in some premiums but after the big sell-off it’s been tough. With this position I decided to go out to 4/16/21 with the Expiration Date. Sometimes you have to do this to keep money coming in. This was a Grasshopper Trade so it’s only 100 shares so it didn’t hurt my account much. Someone with a smaller account might not feel the same.

Today the stock is in the $45 area. I sold 1 4/16/21 $65 Call for a premium of 60¢ for $60. Like I said, not the best situation but I’m bringing in money.

 

Sell to Open 1 NIO 4/16/21 $65.00 C @ 60¢ (+$60)

This trade gets a Risk Factor 1. If I get the bounce I need and get assigned I will not lose money with the $65 Strike Price.

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I bought 1000 shares of Cree (CREE) on 2/22 at $121.50. The stock is down from where I bought. Today it opened a little over $113. The stock moved at the open and I might have jumped the gun a bit because after I was filled the stock continued up. As I write is almost $117.

To get a decent premium I sold a Call 50¢ below my buy-in price. I went with the $121 Strike Price. If I get assigned I’ll lose $500 on the stock sale. I sold 10 CREE 3/19/21 $121.00 Call for a premium of 93¢ for $930. If I give $500 back on assignment it’s OK by me. That’s what I signed up for. I’ve been bringing in premiums and this one is $930.

 

Sell to Open 10 CREE 3/19/21 $121.00 C @ 93¢ (+$930)

This trade also gets a Risk Factor 1.

 

Successful trading,

Steve

The Options Coach