Applied Materials Covered Call

This morning the DOW, NASDAQ and the S&P are moving nicely. With Applied Materials (AMAT) up about $1 I just did a 10 contract Covered Call to expire this Friday.

I bought 1000 shares of the stock at $42.40 and sold 10 contracts of the AMAT 4/9/21 $43 Calls for a premium of $4 for $4000.

Buy 1000 Shares AMAT @ $142.40

Sell to Open 10 AMAT 4/9/21 $143.00 C @ $4.00 (+$4000) 

AMAT is a hot semiconductor stock. This $4 premium gives me a return of 9.4%. I normally wouldn’t touch a premium like this but I really like this stock. Because of this huge premium, and the RSI being up at 70, I give this trade a Risk Factor 2.

 

Successful trading,

Steve

The Options Coach