3 Grasshoppers Trades to Expire 6/11/21
This is a shortened week getting old fast. I decided to get started on next week’s trades. I was filled on Grasshopper Trades with Nokia (NOK), Macy’s (M) and Occidental Petrol (OXY).
Nokia
NOK was upgraded today by Liberum Investment Banking. I feel this is a low risk trade because the price is so low. However, NOK is listed as a meme or Reddit stock. I feel it’s a little different than the other Reddit stocks because it doesn’t fit into Reddit’s normal stock trading criteria. Reddit stocks are heavily shorted but NOK’s short interest is below 1%. This is well below most stocks publicly traded. I bought 500 shares at $5.48 and sold 5 contracts of the NOK 6/11/21 $5.50 Calls for a premium of 30¢ for $150.
Buy 500 Shares NOK @ $5.48
Sell to Open 5 NOK 6/11/21 $5.50 C @ 30¢ (+$150)
I give this trade a Risk Factor 2. Not a 1 because of it’s meme status.
Receiving a 30¢ doesn’t sound like much but I’m sticking with my plan of getting a good return. This premium is 5.4% for a trade expiring next Friday.
I believe the volume is very high because it’s a big day trading stock.
Macy’s
This is a larger Grasshopper Trade. AS you know I’ve been watching M for a while. I liked the numbers so I went with a 5 contract Call.
This was entered a little differently than most Grasshoppers Trades. With the stock at $18.70 I noticed it was at the top Bollinger Band, which is one of my top technical analysis tools. I felt the stock was going to back off a little. With the stock at $18.70 I took an educated chance that the stock would back off and sold 5 of the 6/11/21 $18.50 Calls for a premium of 75¢ for $375. With the stock at $18.70 I sold the $18.50 Calls. I was 20¢ In-the-Money. And at this point I was in a Naked Call. I could have bought the stock there and had an In-the-Money Covered Call but I decided to see if I was right about the stock coming down.
The stock did come down and I bought 500 shares at $18.50. I no longer have a Naked Call, and I’m in a 5 contract, In-the-Money Covered Call.
Buy 500 Shares M @ $18.50
Sell to Open 5 M 6/11/21 $18.50 C @ 75¢ (+$375)
This trade started as a Naked Call but is now a Risk Factor 1. The 75¢ premium is a return of 4%.
Again, I have this listed as a Grasshopper Trade because of the size but the trades were not made in the order of a Grasshopper Covered Call.
Occidental Petrol
Another trade that I went out to next Friday. Today OXY was upgraded by Barclays so I decided to do a 1 contract Covered Call Grasshopper Trade. I bought 100 shares at $29.58 and sold 1 contract of the OXY 6/11/21 $30 Call for a premium of 75¢ for $75.
Buy 100 Shares OXY @ $29.58
Sell to Open 1 OXY 6/11/21 $30.00 C @ 75¢ (+$75)
This trade gives me a return of 2.5% for the premium only. If I get assigned I’ll make an additional 42¢ on the stock sale. If assigned I’ll make a total of $1.17 for a return of 4%.
This trade gets a Risk Factor 1.
Any questions on any of these trades send me an email.
Successful trading,
Steve
The Options Coach