Just Completed a NVDA Covered Call

Yesterday, while I was in the middle making a ton of trades, I was trying to get a 1 contract Covered Call completed with Nvidia (NVDA). I had an order in to buy 100 shares and I had an order in to sell a 1 contract Call. It turned out the stock started moving up and I was filled on my 1 contract Call but was never filled on the buying of the 100 shares. Then the stock moved above my Strike Price so I couldn’t buy the stock until it dropped down, which it never did. Luckily, this morning it did. I was just filled on the buying the 100 shares. First I was filled on a 1 contract 6/26/20 $377.50 Call for a premium of $6.10, then today I was filled on buying 100 shares at $375.50. I now have my NVDA Covered Call.

6/24/20 – Buy 100 Shares NVDA @ $375.50

6/23/20 – Sell to Open 1 NVDA 6/26/20 $377.50 C @ $6.10 (+$610)

My advice is to always buy the stock before you sell the Call. If you do it in the order that I did it could get you in trouble. You could get caught with an In-the-Money  Naked Call. An In-the-Money Naked could be very dangerous, especially with a hot stock like NVDA!

I lucked out so this trade now gets a Risk Factor 1.

This trade gives me a Return on Investment (ROI) of 1.6% and fits into my “1 Week/1%” strategy.

Successful trading,

Steve

The Options Coach