Draftking Covered Call

Draftking (DKNG) has been moving up the last few weeks in anticipation of the sports world getting opened, or at least partially opened. I think this can be a good stock, especially once the pro sports open. I decided to jump on the band wagon and get involved in a 1 week play. It’s not my first with DKNG but it’s my largest.

This morning the stock was off and running. I bought 500 shares a short time after the open and the stock was already up about $2. I paid $41.50. I bought the stock for the sole purpose of selling a Call. The stock was moving so after I bought I watched a little while to see where the Stock might go. I was looking to sell the $45 Call to expire this Friday. It had a premium of $1.80. The stock was moving up so I placed and order to sell 5 6/5/20 $45 Calls for a premium of $2.10. I thought it might have trouble getting there but my patience paid off. I was just filled on the $2.10. The funny part in the stock is still moving. As I write the stock is at $43.40 and the $45 premium is at $2.40. No problem! I’m very happy with my $2.10

6/1/20 – Buy 500 Shares DKNG @$41.50

6/1/20 – Sell to Open 5 DKNG 6/5/20 $45.00 C @ $2.10 (+$1050)

This is a Covered Call on a hot stock, but it is a little volatile, so I gave it a Risk Factor 2.

Hopefully this trade will be a good start to the week. I think it will be!

I’m hoping to get assigned. If I do I’ll keep the $1050 premium and make $3.50 on the stock sale. The $3.50 with 500 shares will be another $1750.

Successful Trading,

Steve

The Options Coach