Made Moves with my EV Stocks
The Electric Vehicle (EV) sector has really taken beating lately. Not only because the NASDAQ has been moving down, but they are having supply line issues because of the worldwide chip shortage.
I’m in a number of these EV stocks: Tesla, Workhorse, Nikola, Nio and Xpeng. All are below where I bought the stocks. Some are down by a large amount.
I’m having a very busy day today, both with trading and teaching. Today the NASDAQ is having a great day, and I hope these days can continue. I need a bunch more days like this to get my account back to looking good. But, even with my account down a little I’m still bringing in some real nice premiums. When all my holdings are back up to where I bought, my account will look very nice. Today I decided to have many of my positions sit idle no longer. I figured let me bring in something, it’s better than nothing. On some of my trades I went out a little further with my Expiration Date in order to get a premium worth my time. These premiums are a little lower than my normal premiums but at least I’m bringing in money. Even if they only cover my business expenses, like margin interest. It’s something!
Let’s take a look at the Calls I sold against my EV stocks.
Tesla
I own 300 shares of Tesla (TSLA). I own 100 shares at $857 and 200 shares at $704. As I write the stock is in the area of $660. Against the 100 shares I bought at $857 I sold a 1 contract last week. The stock is well below my buy-in price so in order to get a good premium I went out to 6/18 with my Expiration Date. I sold the $860 Call for a premium of $42 for $4200. I love 1 week options, but sometimes you have to make adjustments in your strategy.
3/22/21 – Sell to Open 1 TSLA 6/18/21 $860.00 C @ $42.00 (+$4200)
With my 200 shares I bought at $704, today I sold a 2 contract Call. With the stock at $660 I sold a $700 Call expiring tomorrow. If I get assigned I’ll lose $4 on the stock sale. I went up to $700 with the Strike Price because I don’t think it will get there by tomorrow. On this option I do not want to get assigned. I want Tesla to go up but not to $700.
Sell to Open 2 TSLA 4/1/21 $700.00 C @1.25 (+$250)
Xpeng
Xpeng (XPEV) is a Chinese EV maker which is also down from my buy-in price. Today the stock is up $2 but still nowhere near the $46.90 I paid for the stock. Today it’s in the $36 area. On this trade I went out to 5/21 with the Expiration Date. Since that’s 52 days away I went with the $50 trike Price. If I get assigned I will not lose money on the stock sale. I sold 10 XPEV 5/21/21 $50 Calls for a premium of $1 for $1000.
Sell to Open 10 XPEV 5/21/21 $50.00 C @ $1.00 (+$1000)
NIO
I own 1100 shares of the EV stock, NIO. 100 shares I have in “The Grasshopper Field.” On the other 1000 shares I sold a Call today. The stock is in the $38 area today, well below the $65.40 I bought for. I sold 10 NIO 4/16/21 $46 Calls for a premium of 40¢ for $400. Notice the Strike Price of $46 is well below my buy-in price. If assigned I’ll lose a lot of money on this trade. 4/16is 17 days away. I don’t think the stock will get to $46 in that time. If it does I’ll buy another 1000 shares to deliver on the assignment. I will not deliver the shares I bought at $65.40, it would be too much of a loss.
Sell to Open 10 NIO 4/16/21 $46.00 C @ 40¢ (+$400)
Workhorse
I bought Workhorse (WKHS) at $15.85. Today it’s at $13.70. With my 10 contracts I was able to get a 60¢ premium ($600) using the 4/16 Expiration Date, and a $16 Strike Price.
Sell to Open 10 WKHS 4/16/21 $16.00 C @ 60¢ (+$600)
Nikola
I own 1100 shares of Nikola (NKLA) at $18.80. Today the stock is at $14. To get the premium I was happy with I sold 10 contracts of the NKLA 5/21/21 $20 Calls for a 70¢ premium for $700.
Sell to Open 10 NKLA 5/21/21 $20.00 C @ 70¢ (+$700)
The other 1 contract was a Grasshopper Trade in “The Grasshopper Field.” I sold the same option.
Sell to Open 1 NKLA 5/21/21 $20.00 C @ 70¢ (+$70)
This is it for the EV stocks. As you can see I’m not in a great position with any of the stocks. This happens! With the NASDAQ moving down it hurt a lot of my stocks. Today helped a lot!
Sometimes you have to adjust your strategy. As I always say, trading options is not always a smooth highway. Sometimes you hit bumps in the road. You must take detours around the road hazards. This is what I did today. You adjust your Expiration Dates, you go higher with your Strike Prices and you take less premiums. Whatever you have to do!
As these positions expire one at a time I’ll be writing about how they worked out. The only ones I worry about are the ones with a Strike Price lower than my stock buy-in price. More adjustments might be needed in order not to lose money. Let’s watch and see what happens.
I was just filled on another trade order. On 2/22/21 I bought 1000 shares of Cree (CREE) at $121.50. It’s been down in the 105 area for a little while. I decided to sell 10 contracts of the CREE 4/1/21 $113 Calls for a premium of 25¢ for $250. After I was filled the stock popped up and is now at $109. I hope it doesn’t get to $113 by tomorrow. I do not want to get assigned on this Covered Call. I would lose money on the stock sale. Let’s see how the stock moves tomorrow.
Sell to Open 10 CREE 4/1/21 $113.00 C @ 25¢ (+$250)
Some of these trades might be confusing to young Grasshoppers. If you have questions send me an email.
Successful trading,
Steve
The Options Coach