Results Week Ending 3/26/21

Last year ended great, and 2021 started the same. However, about a month into the year things started to change. Many of the big cap names in the NASDAQ lost a lot of value with the index selling off. A lot of this had to do with interest rates, and the worldwide chip shortage.

This year with COVID in full swing China had to close down many of the chip factories. Every electronic in the world contains chips; nowadays all electronics are smart. One of the hardest hit industries was the Electric Vehicle (EV) makers. It just so happens that I am very bullish on the EV sector, and I’m invested in a bunch of the big names; Tesla, Nikola, NIO, Workhorse and Xpeng. All of these stocks are down! I also have losses in Palantir and Peloton. I continue to bring in nice premiums with Peloton but Palantir is a problem. The stock is cut in half from where I bought it and the Implied Volatility (IV) has been low, so the premiums are not worth selling the Calls.

The bad news is that I’m in some of the big cap names that are down, and the chip shortage will last the better part of this year. At this point my account is down a little over 20%.

Let’s look at the good news. There is talk of the world economies having a big rebound as the vaccination get more widespread and businesses reopen. The best news is that I was well prepared for the market sell off, mainly the NASDAQ. By being prepared I mean I had cash on the sideline. This is keeping me in the game. Between selling Calls on previously owned positions and getting into a few new positions, I’ve been able to keep the money coming in. I have not had a week bringing in less that $10,000 and this week I brought in a little over $18,000. Bringing in this kind of money, and my account still being down, shows how some of my stocks are taking a beating. I still have a great outlook on the year. If I can continue bringing in great premiums, and the stocks recover, I think my account will explode. If I continue taking in $10K a week, which is a half a million dollars, I do not see my stocks taking that much of a beating. I’m confident I’ll have another very good year.

If some of your positions are down, hang in there! I believe things will be getting better. You are not the only one with positions below their buy-in price. Figuring out what actions to take, and making some good moves, is what makes a good trader. Sometimes I just stare at my screen until something pops into my head. I wear down the buttons of my calculator trying to come up with the answer. There are tons of options to take. You must find the correct move for your situation. I’m always here for some suggestions.

Below are the trades that gave me a great week.

 

Nikola

The stock is below my buy-in price but I was able to take in a premium. To get a good premium I sold the Call 11 days before expiration. This was a 2.6% return.

3/15/21 – Sell to Open 10 NKLA 3/26/21 $19.00 C @ 50¢ (+$500)

3/26/21 – Expired 10 NKLA 3/26/21 $19.00 C

Profit +$500

Applied Materials

I was assigned on this Covered Call. This premium is a 2.1% return, plus I was assigned making another $150 on the stock sale.

3/3/21 – Buy 1000 Shares of AMAT @ $115.85

3/26/21 – Assigned 1000 Shares AMAT @ $116.00

Profit +$150

3/19/21 – Sell to Open 10 AMAT 3/26/21 $116.00 C @ $2.50 (+$2500)

3/26/21 – Expired 10 AMAT 3/26/21 $116.00 C

Profit +$2500

Applied Materials

Last week I liked the look of AMAT and I decided to sell a 10 contract $116 Put. I was surprised but I was assigned and had the 1000 shares put to me at $116. The stock started moving up and I sold a $120 Call against these shares. This week the stock took off and closed above $128. I was assigned at $120 making $4000 on the stock sale. However, there was a nice size Opportunity Lost.

This was a 1.5% premium. The premium was a little less because I went with a higher Strike Price of $120. The higher Strike Price paid off because I was assigned making $4 on the stock.

3/19/21 – Buy 1000 AMAT @ $116.00

3/26/21 – Assigned 1000 Shares AMAT @ $120.00

Profit +$4000 

3/22/21 – Sell to Open 10 AMAT 3/26/21 $120.00 C @ $1.75 (+$1750)

3/26/21 – Expired 10 AMAT 3/26/21 $120.00 C

Profit +$1750

Advanced Micro Devices

This was a 5 contract Covered Call without assignment. AMD is one of the chip stocks down with the shortage.

3/22/21 – Sell to Open 5 AMD 3/26/21 $81.50 C @ $1.00 (+$500)

3/26/21 – Expired 5 AMD 3/26/21 $81.50 C

Profit +$500

Workhorse

A Covered Call without assignment. Let’s hope the EV stocks start to move. This premium is lower that last week’s but it’s still 3.1%. I’d love to get this every week.

3/22/21 – Sell to Open 10 WKHS 3/26/21 $16.00 C @ 50¢ (+$500)

3/26/21 – Expired 10 WKHS 3/26/21 $16.00 C

Profit +$500

Tesla

Another good premium but the stock is way down. Looking for a bounce this week for another Call. I need a big bounce!

3/22/21 – Sell to Open 2 TSLA 3/26/21 $710.00 C @ $15.00 (+$3000)

3/26/21 – Expired 2 TSLA 3/26/21 $710.00 C

 Profit $3000

Cree

The stock is down from my buy-in price. I’m in the stock at $121 but I sold the $110 Calls. I took a shot and it worked. Not a good premium but it’s still $350. I’ll take it!

3/24/21 – Sell to Open 10 CREE 3/26/21 $110.00 C @ 35¢ (+$350)

3/26/21 – Expired 10 CREE 3/26/21 $110.00 C

Profit +$350

Peloton

With the stock well below my buy-in price I’ve been having some luck selling Calls and not getting assigned. I’ve been taking in nice premiums every week. Let’s hope it can continue without assignment.

3/19/21 – Sell to Open 20 PTON 3/26 $122.00 C @ 75¢ (+$1500)

3/26/21 – Expired 20 PTON 3/26/21 $122.00 C

Profit +$1500

Penn Gaming

I like Penn so I sold a Put for a great premium. I was assigned at $111 and I keep the $3250premium. I would like a pop on Monday to get a Call sold.

3/22/21 – Sell to Open 10 PENN 3/26/21 $111.00 P @$3.25 (+$3250)

3/26/21 – Expired 10 PENN 3/26/21 $111.00 P

 Profit +$3250

Nikola

This was a 1 contract Grasshopper Trade. Not much money but it’s a 2.6% return. This is what you look for with Grasshopper Trades. The stock moved down more so this week might be a problem.

3/15/21 – Sell to Open 1 NKLA 3/26/21 $19.00 C @ 50¢ (+$50)

3/26/21 – Expired 1 NKLA 3/26/21 $19.00 C

Profit +$50

MOMO

Another Grasshopper Trade. Citi gave the stock an upgrade this week. I think we can get a pop. I think this is a good stock for Grasshopper trades. This was a 3.5% return.

3/19/21 – Sell to Open 2 MOMO 3/26/21 $17.00 C @ 60¢ (+$120)

3/26/21 – Expired 2 MOMO 3/26/21 $17.00 C

Profit +$120

Total Weekly Gain +$18,170

This was a great week while the NASDAQ is struggling. I hope I can continue taking in weekly numbers like this while we wait for my stocks to recover.

Enjoy the weekend!

 

Successful trading,

Steve

The Options Coach