Grasshopper Trade with Harley Davidson

I bought 200 Shares of Harley Davidson (HOG) on 5/17/21 for $51.10. I bought these shares as a Grasshopper Trade to do a Covered Call. The trade was based on a report by the Najarian Brothers from CNBC. It was on their “unusual activity” list. They felt the stock was gonna move up for a few weeks. I did not completely believe in the trade so I did a Grasshopper Trade of 200 shares and not a Master Trade of many more shares. Also, I bought the shares at $51.10 and sold an In-the-Money Call with the Strike Price of $51. I made the trade to get assigned and move on.

If you look at the candle stick chart you will see May 17th is where the stock hit it’s high and it’s been moving down ever since. Needless to say I was not assigned and I’m still holding the stock at a much lower price.

This is a great lesson! The lesson is, don’t listen to the Najarian Brothers, or any other guru. You must do your own homework.

I’m at the point I just want out. However, the stock is on the move today. With the stock up 2% today I decided to sell a Call instead of just selling for a loss. With the stock at $40.35 I sold 2 HOG 9/3/21 $41.50 Calls for a premium of 45¢ for $90. This premium is a return of a little less than 1%. And if I get assigned I’ll take a big loss on the stock sale. Either way I’m ready to move on. Sometimes it feels good to dump some old positions. If I don’t get assigned I continue to try to sell Calls.

 

Sell to Open 2 HOG 9/3/21 $41.50 C @ 45¢ (+$90)

 

 

Successful trading,

Steve

The Options Coach