Grasshopper Trades with PLTR & HOG
I made 2 Grasshopper Trades 1 with Palentir (PLTR) and 1 with Harley Davidson (HOG). I made both of these trades giving me a better chance to get assigned.
With PLTR this is my 2nd Grasshopper Trade to expire this week. To better my chances to get assigned both of these trades are At-the-Money Covered Calls. Last week on Wednesday I bought 200 shares of PLTR at $19.50 and on Friday I sold 2 $19.50 Calls to expire this Friday. This gave me a 60¢ premium for $120. This trade has a 3% Return for the premium. If assigned I will break even on the stock. I’m in this trade for the 3% premium only.
Today I bought another 200 shares at $20. With these shares I also did an At-the-Money Covered Call. I sold 2 PLTR 5/21/21 $20 Calls for a premium of 60¢ for the same $120 as the 1st Covered Call above. This trade also gave me a return of 3%.
At-the-Money Covered Call
Buy 200 Shares PLTR @ $20.00
Sell to Open 2 PLTR 5/21/21 $20.00 C @ 60¢ (+$120)
With PLTR reporting very good earnings I think I have a good chance to get assigned on both of my PLTR Covered Calls.
For my next trade I did an In-the-Money Covered Call with Harley Davidson (HOG). This stock is a little more expensive but it’s still good for a new trader. The In-the Money Calls gives me a better chance of getting assigned than the At-the-Money Call. I bought 200 shares of HOG at $51.10 and sold 2 5/21/21 $51.00 Calls for a premium of $1.25 for $250.
In-the-Money Covered Call
Buy 200 Shares HOG @ $51.10
Sell to Open 2 HOG 5/21/21 $51.00 C @ $1.25 (+$250)
This premium is 2.4% of my buy-in price. However, if I get assigned I’ll lose 10¢ on the stock sale. If I don’t get assigned I keep the stock and the higher premium.
On assignment I lose 10¢ on the stock sale which for the 200 shares will be $20. So my gain of $250 with the premium will be cut to $230. When selling an In-the-Money Call this is what you sign up for. When you want to get assigned, as I do, you sign up to give a little back to help get assigned. If assigned you move on.
These trades above are listed on the Grasshopper Trades page, also on the Active Trades/Current Positions page.
I hope most readers took a look at my Changes to MS beats WS post. If you haven’t please take a look now.
To save time I will not be writing a long post on my larger trades, but I will continue writing about my Grasshopper Trades. We’re getting back to the main reason I started Main Street beats Wall Street in the first place. And that’s to learn from trades new traders can relate to.
I did make another Larger In-the-Money Covered Call with Pinterest (PINS). I write a little about this one because it can be a good learning trade. This trade was more in the money than the HOG trade above. With PINS I bought 1000 shares of the stock at $56.90 and sold 10 PINS 5/21/21 $56 Call for a premium of $1.90 for $1900. You will notice on an assignment I’ll be giving back 90¢ on the stock sale. On 1000 shares that’s $900. Again I made this trade to try to get assigned. I brought in a $1.90 premium and on assignment I give back 90¢ for a $1 profit of $1000. The premium is a return of 3.3%, however, on assignment I’ll keep $1 of the $1.90 premium. This will be a return of 1.75%. I’m very happy with this for a 1 week trade and this trade will fit into my “1 Week/1%“ strategy. Again I sell In-the-Money Calls to help my chances of getting assigned.
I have a few more positions set to expire this Friday. You can check them out on the Active Trades page.
If you have any questions on these trades send me an email. This is an important strategy to understand why and when you do it.
Successful trading,
Steve
The Options Coach