Several More Trades to Report
I’m having another very busy Monday. I still have a lot of buying power in my margin because I only made 1 trade that cut into my sideline money. All other trades are Covered Calls on previously own stock. When you own stock and sell a Covered Call it doesn’t cost anything. It actually gives you more buying power because the premium adds to that account. Remember you must manage your money to be successful, and stay out of trouble. The 1 trade that reduced my sideline money is a Put I sold on Penn National Gaming (PENN). Let’s take a look at the trades I made since my last post.
Workhorse
I bought 1000 shares of WKHS on 2/25 and have been selling Calls every week. This week the Implied Volatility (IV) is a little lower so the premium is also a little lower. I’m still happy. On this Call I received a premium of 50¢ which is 3.1%. Well above my goal of “1 Week/1%.”
Sell to Open 10 WKHS 3/26/21 $16.00 C @ 50¢ (+$500)
This trade gets a Risk Factor 1.
Tesla
I own 300 shares of Tesla. The 200 shares I’ve been selling Calls against every week I bought on 3/1 at $704. I’ve been bringing in some very nice premiums. Today I sold another Call bringing in another great premium of $15 on the 2 contracts for a total of $3000.
I also own 100 shares I bought on 2/2 at $857. It’s been hard getting a good premium on these shares because Tesla dropped too low. Today I decided to stop having these shares idle so I sold a Call going out to 6/18/21.
Here are the 2 different Calls I sold with my Tesla shares. First we look at the 2 contract Call.
Sell to Open 2 TSLA 3/26/21 $710.00 C @ $15.00 (+$3000)
With the 100 shares I bought at $857 I sold 1 contract of the 6/188/21 $860 Call for a premium of $42 for $4200. These shares are down almost $200 from where I bought so I’m happy getting a premium of $4200, but I’ll be in this position until June 18th. No problem! I’ll wait the 3 months. I’d love to get assigned. If I do that means Tesla went up $200.
Sell to Open 1 TSLA 6/18/21 $860.00 C @ $42.00 (+$4200)
Both of these Tesla trades get a Risk Factor 1.
The last trade to report is with PENN. I wanted to get involved in a gambling stock and I was thinking Draftkings or Penn. With Penn down today, instead of buying the stock I decided to sell a a Put. With the stock in the $114 area I decided to sell 10 contracts of the PENN 3/26/21 $111 Puts for a premium of $3.25 for $3250. If the stock drops below $111 I’ll have the stock put to me. The way this stock has been moving, and with March Madness in full swing, I think getting PENN for $111 would be a good price. If PENN continues up and I don’t get assigned I keep the $3250 premium and move on.
Sell to Open 10 PENN 3/26/21 $111.00 P @$3.25 (+$3250)
This trade gets a Risk Factor 3. It gets a 3 because there’s always a risk of the stock selling off and I’d have to pay $111 per share with the stock much lower. This is the big risk with selling Puts.
Successful trading,
Steve
The Options Coach