Results Week Ending 5/28/21
The last few weeks have been quite different for the stock market. Before that it’s been a really tough market to play. I gage my success and happiness with the stock on how many positions get assigned. This week I was assigned on every new position I entered, 3 being Grasshopper Trades listed below. I feel if I get assigned, my position went up. I get the premium for selling a Call and I make a little on the stock. A few positions I entered this week have a substantial size Opportunity Lost. This is OK! If I get a 1 or 2% premium, plus another 1 or 2% on the stock, I am very happy! Yes, it’s nice making a killing once in a while but slow and steady keeps me pumped. In the long run, slow and steady is the way to go.
I know this has been a very tough year for new traders, and you might be stuck in a few positions, but believe me this is a great time to be learning. It’s easy when everything goes well and the money is flying in, but you must learn what to do when things don’t go well. Things haven’t been going well so you’re learning how to deal with problems. I know it doesn’t feel good now but in the future when you have more money on the line you will be happy you have an arsenal of strategies on dealing with rough terrain. This is a great time to learn!
This week I made 3 Grasshopper Trades and all 3 were assigned. Let’s take a look at them.
Macy’s
I bought 500 shares of Macy’s at $18.20 and sold the $18 Call. I do this when I’m not so sure how the stock is gonna move. Selling an In-the-Money Call gives me a better chance of getting assigned, plus if I don’t get assigned I keep the bigger premium. This premium was 60¢ on a $18.20 stock. That’s a return of 3.3% for a 1 week trade.
This position was assigned. I bought the stock at $18.20 and sold for $18 losing 20¢. This is what I signed up for. The premium was $300 and I lost $100 on the stock assignment leaving me with a $200 premium on the In-the-Money Covered Call. This is a return of 2.2% for the 1 week trade. I love this play!
In the-Money Covered Call
5/24/21 – Buy 500 Shares Macy’s@ $18.20
5/28/21 – Assigned 500 Shares M @ $18.00
Loss -$100
5/24/21 – Sell to Open 5 M 5/28/21 $18.00 C @ 60¢ (+$300)
5/28/21 – Expired 5 M 5/28/21 $18.00 C
Profit +$300
In-the-Money Covered Call total gain +$200
With PINS I bought 100 shares of the stock at $63.50 and sold the $64 Call. I was assigned and I move on. I took in a premium of 95¢ which is 1.5%, plus I made 50¢ on the stock. This Covered Call gave me a total return of 2.2%. Deal over!
5/25/21 – Buy 100 Shares PINS @ $63.50
5/28/21 – Assigned 100 Shares PINS @ $63.50
Profit +$50
5/25/21 – Sell to Open 1 Pins 5/28/21 $64.00 C @ 95¢ (+$95)
5/28/21 – Expired 1 PINS 5/28/21 $64.00 C
Profit +$95
U.S. Steel
This was an At-the-Money Covered Call. I bought 200 shares of X at $24.50 and sold the $24.50 Call. This gives me a little better premium. The industrial stocks have been up and down lately, very hard to predict. But with the infrastructure bill in constant negotiation the stocks are staying in a trading range. I just wanted to get assigned, which I did. I was assigned at $24.50, the same price I paid for the stock and made a 45¢ premium for a return of 1.8%.
5/25/21 – Buy 200 Shares X @ $24.50
5/28/21 – Assigned 200 Shares X @ $24.50
Profit $0
5/26/21 – Sell to Open 2 X 5/28/21 $24.50 C @ 45¢ (+$90)
5/28/21 – Expired 2 X 5/28/21 $24.50 C
Profit +$90
Total Weekly Gain +$435
This 1 week of trading gave me a return of 2.13%. If you did this every week the annual return would be 110%. Is $435 a lot of money? No, but it’s a nice salary for making 3 trades. The main thing is the Rate of Return, 110% annually. Out of all the T.V. gurus, are there any, including Warren Buffet that brings in 110% a year. NO WAY!
I also had a nice week with my entire trading account. I brought in $6965 and was assigned on another 5 Covered Calls. You can see all my trades on the Active Trades/Current Positions page.
The last 2 administrations this country’s policies have taken a 180º turn. With each set of policies half the people like the policy and half do not. It seems like this country is split right in half and the elections will show that. Whatever the policies are there’s one thing we must remember, we live in the greatest country ever, hands down!
This memorial Day I would like to thank all service men and women living today. Also, there’s American blood spilled all over this globe to make sure we are able to live the life we live. I would like to thank the men and women who never made it home from one of our many foreign wars, and the men and women who died on our soil, they will continue to be in my prayers. I also believe the American Memorial Day should be celebrated all around the world. Not only did our men and women fight for our lives, but they fought to give our way of life to billions of people and many countries all over this world.
God Bless the USA
God Bless our Service Men and Women
Enjoy your long weekend, Happy Memorial Day!
Successful trading,
Steve
The Options Coach