Results Week Ending 6/11/21
As a recap, My smaller trades or a trade made by a newer trader is called a “Grasshopper Trade.” A larger trade made by me that is too big for a Grasshopper is called a “Master Trade.”
We do have new subscribers joining all the time so I’ll write this once in a while so all readers are on the same page.
Also, when you look at the trade history pages, Trade History 2021 or Grasshopper Trade History 2021 you will notice some of the trades will have a caption or a note. For example: At-the-Money Covered Call, In-the-Money Covered Call or Deep In-the-Money Covered Call. I put this there so the readers will understand with assignment there will be no profit on the stock sale with At-the-Money Covered Call and a loss on the stock with the In-the-Money Covered Calls. This “no profit” or “loss” is not a result of a mistake or a trade going against me. This is a position I went into with a strategy for the larger premium. When I do this the profit will be more with the premium but smaller with the stock sale on assignment, even a loss on the assignment with In-the-Money Calls.
I would like to welcome the new readers who joined Main Street beats Wall Street this week. If the subscriptions continue to go up we might have “Reddit like” power to move stocks soon lol. We need about a million more readers, pass the word lol.
We had a fantastic week! With both the Grasshopper Trades and the Master Trades. Combined we had a busy week with 16 trades coming to an end. Out of the 16 trades, 11 were assigned. Grasshopper Trades were half of them with 8, 5 getting assigned. As you’ll see below, with the Grasshopper Trades we had the biggest week since week ending 2/19/21 locking in $1539. With my entire account I locked in a whopping $10,994.
With the Grasshopper Trades I’ve been having a very nice year and I hope you’re learning a lot. However, my Master Trades have taken a beating early in the year. March, April and May were very tough months. It was extremely hard to pick winning positions with the way the markets were moving. Things seem to be settling down and the markets are moving better. And my account is showing that in a big way. Most of my stock positions are bouncing back and I’m taking in some nice premiums.
This brings me to my desire to get assigned. As a new trader, or a trader trying to find a new path to follow, you must understand that I love to get assigned. This does not mean getting assigned is everyone’s strategy. Some traders hate to get assigned and lose their stock. Many books are printed about trying to avoid getting assigned. I feel my job is to teach you how options work and show you my strategies. I’ve been successful doing what I do but that doesn’t mean you have to do exactly what I do. With your strategic mind you must figure out what strategy is best for your account size and your risk tolerance. My own son and son in-law don’t do exactly what I do, and they’re contributing writers to Main Street beats Wall Street. Many of my students started, and saying, they want to do exactly what I do. Some are now trading for a few years and do nothing I do.
Back to assignment. I like getting assigned because many times I don’t get assigned and the stock goes down. Sometimes getting stuck in the stock for many months with it well below where I bought it. I like to take what I sign up for and move on. If I get a 2% premium and make 1% on the stock assignment, I’m happy! I feel if I play this game to not get assigned I get smaller premiums, and sometimes the stock goes down. On the other hand, some take the smaller premium by going up a little more with the Strike Price and don’t get assigned because this is their strategy. Maybe they feel the stock is going up much higher and want to get that stock’s capital gain. Maybe they’re in the stock for the dividend and don’t want to lose the stock. They just want to take in a little more with premiums. This is what makes this game so great, you can make up your own strategy according to your philosophy and risk tolerance and look for stocks that fit into that strategy.
Me, I like to get assigned. Give me my nice premium, give me a little stock gain, and I move on. I believe it’s all about the Return on Investment (ROI). The realistic, consistent ROI. This week I brought in about 5% with my Grasshopper Trades. Multiply this by 52 weeks and you have 260%. You can look at any trader/investor’s record and they are not doing numbers like this. You look at any trader who doesn’t want to get assigned on Covered Calls and keep their stock, they are not doing numbers like this. I completely understand that 5% is very hard to do every week, but this is my goal with assignment, and I think it’s achievable!
Let’s take a look at this week’s Grasshopper Trades. Remember, you can see all my trades, Grasshopper and Master, on my Active Trades/Current Positions page.
Nokia
This was a 5 contract trade. I bought the stock at $5.48 and sold the $5.50 Call. The stock dropped a few cents and closed at $5.43. With this trade I brought in a 30¢ premium. With my stock price of $5.48 that’s a return of 5.4%, fantastic!
6/3/21 – Sell to Open 5 NOK 6/11/21 $5.50 C @ 30¢ (+$150)
6/11/21 – Expired 5 NOK 6/11/21 $5.50 C
Profit +$150
I’m looking to get out of this stock. I wasn’t assigned so I still own it. I looked at the $5.50 premium for next week and it was 10¢. A big difference from 30¢. This happens sometimes. At the open on Monday I hope the stock moves up. But either way I’m going to sell the stock. Even if I lose a few cents. For some reason the volatility went down, the premiums are small, and I no longer want to be in this stock for my strategy.
Macy’s
At-the-Money Covered Call
This was an At-the-Money Covered Call. The stock went up and I was assigned. This was another 5 contract Grasshopper Trade and the At-the-Money Call gave me a return of 4%. I could have gone up with my Strike Price and taken in a smaller premium. but I might not have been assigned. I liked that I was assigned. I didn’t make anything on the stock sale but I brought in a nice $375 premium.
6/3/21 – Buy 500 Shares M @ $18.50
6/11/21 – Assigned 500 Shares M @ $18.50
Profit +0
6/3/21 – Sell to Open 5 M 6/11/21 $18.50 C @ 75¢ (+$375)
6/11/21 – Expired 5 M 6/11/21 $18.50 C
Profit +$375
Occidental Petroleum
Bought 100 shares, sold a 1 contract Call, and I was not assigned. Brought is a 2.5% premium and I’ll try to sell another on Monday. If I was assigned I would have made money on the stock and moved on. Doesn’t always work that way!
6/3/21 – Sell to Open 1 OXY 6/11/21 $30.00 C @ 75¢ (+$75)
6/11/21 – Expired 1 OXY 6/11/21 $30.00 C
Profit +$75
U.S. Steel
U.S. Steel started moving late in the week and I was assigned on this 2 contract Covered Call. Brought is a 2.8% premium and made $84 on the stock assignment. The total gain was 4.5%.
5/28/21 – Buy 200 Shares X @ $26.08
6/11/21 – Assigned 200 Shares X @ $26.50
Profit +$84
6/4/21 – Sell to Open 2 X 6/11/21 $26.50 @ 75¢ (+$150)
6/11/21 – Expired 2 X 6/11/21 $26.50 C
Profit +$150
U.S. Steel
At-the-Money Covered Call
This was another 2 contract Call with X only this was an At-the-Money Covered Call. I brought in the same premium as the trade above but made nothing on the stock assignment.
6/1/21 – Buy 200 Shares X @ $26.50
6/11/21 – Assigned 200 Shares X @ $26.50
Profit +0
6/11/21 – Sell to Open 2 X 6/11/21 $26.50 C @ 75¢ (+$150)
6/11/21 – Expired 2 X 6/11/21 $26.50 C
Profit +$150
Palantir
Another Covered Call with assignment. My premium was 2% and made $25 on the stock assignment.
6/7/21 – Buy 200 Shares PLTR @$24.25
6/11/21 – Assigned 200 Shares PLTR @ $24.50
Profit +25
6/7/21 – Sell to Open 2 PLTR 6/11/21 $24.50 C @ 50¢ (+$100)
6/11/21 – Expired 2 PLTR 6/11/21 $24.50 C
Profit +$100
Workhorse
Deep In-the-Money Covered Call
This was a Deep In-the-Money Covered Call. I bought the stock at $14.50 and sold the $13.50 Call. I signed up to take a loss on the stock assignment in exchange for the large premium. If I sell a Call $1 or more In-the-Money I call it Deep In-the-Money.
6/7/21 – Buy 200 Shares WKHS @ $14.50
6/11/21 – Assigned 200 Shares WKHS @ $13.50
Loss -200
6/7/21 – Sell to Open 2 WKHS 6/11/21 $13.50 C @ $1.75 (+$350)
6/11/21 – Expired 2 WKHS 6/11/21 $13.50 C
Profit +$350
With this trade I brought in a premium of 12% knowing if I was assigned I’d be giving back $1 on the stock. If I wasn’t assigned I’d keep the stock and keep the 12% premium. I was assigned so my total return was 5.2%, down from the 12% because I lost money on the stock. You’ll see me doing more of this strategy.
Skillz
I bought the stock at $22.70 and sold the $23 Call. I was not assigned. I keep the stock and the 6% premium.
6/7/21 – Sell to Open 2 SKLZ 6/11/21 $23.00 C @ $1.40 (+$280)
6/11/21 = Expired 2 SKLZ 6/11/21 $23.00 C
Profit +$280
Total Weekly Gain +$1539
As you can see this was a very nice week. In addition I did well with the Master Trades. My total weekly gain was $10,994.
Again, I’d like to welcome the new readers. If you have any questions send me an email.
Enjoy the weekend!
Successful trading,
Steve
The Options Coach