Busy Morning!
Today the market was ready to open up about 300 points, but at about 8am drug maker Moderna Inc came out with news about a possible vaccine. This news caused the futures to go up into the 700 area. As I write then market is up 785 points.
I had a very busy morning. I’m sorry I didn’t get the trades posted as I made them but I was very busy watching the charts. Below are trades I was filled on in the last hour.
RH – Covered Call
Last week I bought 100 shares of RH at $155.50. Today I sold a 1 contract Call $167.50 Call to expire this Friday. I received a premium of $4. This is a Rate of Return of 2.5%. This is a Covered Call on a good stock so it gets a Risk Factor 1.
Sell to Open 1 RH 5/22/20 $167.50 C @ $4.00 (+$400)
Draftking – Covered Call
DKNG has been a hot stock since it went public a few weeks ago. It’s not one of my favorites because it doesn’t fit into my strategy. I work on margin and you cannot buy this stock on margin. But to get in the game a little I bought 200 shares at $29.80 and sold a $30 Call to expire Friday. I got a premium of $2 for a Rate of Return of 6.7%. I figured for this return it was worth the risk. This trade gets a Risk Factor 2.
Buy 200 Share DKNG @ $29.80
Sell to Open 2 DKNG 5/22/20 $30.00 C @ $2.00 (+$400)
United Airlines – Covered Call
I already own 1000 Shares of UAL at $28. The stock is way down to $23.25. I couldn’t get much of a premium on a Call expiring this Friday so I went out to next week. I sold 10 5/29/20 $26 Calls. I’ll watch this closely because I sold the $26 Call but I’m in the stock at $28. If I get assigned I’ll lose $2000 on the stock sale. If the stock moves I might cover this Call with another 1000 shares. This is a Covered Call on previously owned stock so it gets a Risk Factor 1.
Sell to Open 10 UAL 5/29/20 $26.00 C @ 50¢ (+$500)
Square – Naked Call
This is a 5 contract Naked Call. This is a risky trade! I made it because SQ received a downgrade today, and it received a few more in the last few weeks. I’l watch this position closely. If the stock goes up I’ll cover. This is a Naked Call so it gets a Risk Factor 5.
Sell to Open 5 SQ 5/22/20 $80.00 C @ $1.50 (+$750)
Nvidia – Triple Play Hedge
This is the big trade of the day. It’s a NVDA Triple Play Hedge. I only did 2 contracts because NVDA is a very high priced stock. If you are a new reader please read my Triple Play Hedge page.
I bought 200 shares at $350 and sold 2 contracts each of the $360, $370 and the $380 Calls. All expiring this Friday. Check out the premiums, there’s a total of $4490. This one I’ll watch very closely! Especially Thursday afternoon, they announce earnings.
Buy 200 Shares NVDA @ $350.00
Sell to Open 2 NVDA 5/22/20 $360.00 C @ $10.25 (+$2050)
Sell to Open 2 NVDA 5/22/20 $370.00 C @ $7.20 (+$1440)
Sell to Open 2 NVDA 5/22/20 $380.00 C @ $ 5.00 (+$1000)
If things work out the way I want this will be a very good week. But we have a long way to go.
We have a few new subscribers. I would like to welcome you to the Main Street beats Wall Street family. If you have any questions send me an email and I’ll do what ever I can to make sure you make money.
Successful Trading,
Steve
The Options Coach