Results Week Ending 4/1/21
This week we completed the 1st quarter of 2021. It seems like the DOW is hitting a new all time high every week. The NASDAQ, however, is about 700 points below it’s high of February 6th. It so happens that my stock holdings are largely in the NASDAQ; big tech and the Electric Vehicle (EV) sector. Then, of course, there’s Peloton a COVID stock. Peloton is struggling as we get further out of the pandemic. I’m not as concerned about Peloton, it’s way down from my buy-in price but I brought in a ton of premiums over the last few months.
This week the NASDAQ started to look better. While my big tech stocks are still below their highs I’m not worried about them. The EV stocks are down because of the chip shortage. As we move closer to the other side of the pandemic I feel the chip shortage will come to an end.
The good thing is, as the NASDAQ was not moving well I was still able to bring in good premiums. I’ve been harping on account management. This is very important. Do not invest your entire account. Always have cash available. If you remember, as things started to look like the markets were going to pull back I started stacking money on the sideline. This kept me in the game. My account is down on the year but I keep bringing in my weekly money. I’m able to do this because of account management. If all your money is tied up, and all your positions go down, you will have a problem continuing to bring in good premiums on the stocks that are down. On my positions that are down I bring in smaller premiums but I always have a good amount of money ready to go to work.
This is the 1st week of the year where I didn’t bring in my $10,000 goal. I could have but I didn’t want to push my account to the point it was not managed well. I’m not crying, I did lock in $7900! Not bad for the 1st week not hitting $10K. The week of 2/26 I did $9855. I feel that was close enough lol.
I feel if I keep hitting my goal I’ll have a good year. How good? Well that depends on how my stocks recover. But even if they don’t I feel I can continue to bring in the $10K and this alone will give me a good year. If they fully recover I’ll have a great year. The bottom line is if I get assigned I don’t have to worry about my stocks, I’ll be out!
The lesson here is account management. This week I was assigned on 1000 shares of AMAT, PTON & CREE. This helps my account management. If you manage your account well you will always be able to bring in money. The number 1 job is to pick good stocks, but even good stocks go down. So, you must have money available on the sideline. We want out accounts to grow, but you must position yourself to always be able to bring in money. If I can bring in my weekly goal, I’m happy!
For the new subscribers you must understand I love getting assigned on my Covered Calls.
Let’s take a look at this week’s trades.
Applied Materials
AMAT is a hot stock right now. It’s doing a bit better, as a semiconductor stock it’s getting a lot of investors with people moving away from the chip companies. I was assigned on this Covered Call. A $2250 premium, then a $1200 profit on the stock sale. The stock really took off this week.
3/29/21 – Buy 1000 Shares AMAT @ $124.80
4/1/21 – Assigned 1000 Shares AMAT @ $126.00
Profit +$1200
3/30/21 – Sell to Open 10 AMAT 4/1/21 $126.00 C @ $2.25 (+$2250)
4/1/21 – Expired 10 AMAT 4/1/21 $126.00 C
Profit +$2250
Penn Gaming
I was put 1000 shares to me at $111 as a result of me selling a Put Option. The stock dropped back a bit but recovered yesterday. The stock closed at $107.50. I should get a nice premium next week. This week’s premium was a little low because of the stock being down. Sometimes you have to take what you can get. I’ll take the $700!
3/30/21 – Sell to Open 10 PENN 4/1/21 $111.00 C @ 70¢ (+$700)
4/1/21 – Expired 10 PENN 4/1/21 $111.00 C
Profit +$700
Peloton
Peloton was moving this week so I bought another 1000 shares to sell Calls against. I was assigned with the $1750 premium and a $1000 profit on the stock.
3/30/21 – Buy 1000 Shares PTON @ $106.00
4/1/21 – Assigned 1000 Shares PTON @ $107.00
Profit +$1000
3/30/21 – Sell to Open 10 PTON 4/1/21 $107.00 C @ $1.75 (+$1750)
4/1/21 – Expired 10 PTON 4/1/21 $107.00 C
Profit +$1750
Tesla
Tesla is way down from my buy-in price. I bought in at $704. Wednesday with the stock in the $660 area I decided to try to get a small premium, again, better than nothing. But if you use a Strike Price lower than your buy-in price you have a chance of getting assigned. I sold 2 contracts of the $700 Calls. The stock did get up to $692 but I didn’t get assigned. If I was assigned I would have lost $800 on the stock sale. I’m happy I was not assigned! The $250 isn’t much but it helps with business expenses, like margin interest.
3/31/21 – Sell to Open 2 TSLA 4/1/21 $700.00 C @1.25 (+$250)
4/1/21 – Expired 2 TSLA 4/1/21 $700.00 C
Profit +$250
Cree
This trade was a little scary. I own Cree at $212.50. I sold a 10 contract Call with the Strike Price of $113 because the stock was down. Yesterday the stock moved up a big $7. I saw I had a good chance of getting assigned at $113 putting me in a position to lose a lot of money on the stock sale. With the stock at $112.50 I bought another 1000 shares to deliver with assignment if the stock went above my $113 Strike Price. I’m glad I bought the shares because the stock closed at $115.23. The result of my adjustment trade is I had the stock at $112.50 to deliver at $113, and I still own my shares at $121.50 to sell more Calls this week.
The result of this trade is the reason it’s nice having money on the sideline ready to work.
4/1/21 – Buy 1000 Shares CREE @ $112.50
4/1/21 – Assigned 1000 Shares CREE @ $113.00
Profit +$500
3/31/21 – Sell to Open 10 CREE 4/1/21 $113.00 C @ 25¢ (+$250)
4/1/21 – Expired 10 CREE 4/1/21 $113.00 C
Profit +$250
Total Week Gain +$7900
Yes this week didn’t quite hit my weekly goal, but I go into the Easter weekend feeling better the last few weekends. While locking in a little less this week my account really popped Wednesday and Thursday. Let’s hope the NASDAQ continues to run up.
I hope everyone has a great Easter weekend!
Any questions send me an email.
Successful trading,
Steve
The Options Coach