Check Out these Trades
It’s Friday and the trading week just ended. I wanted to write about a few trades.
The 1st one is with Peloton (PTON.
I’m writing about this trade now because I didn’t want to report it during the trading day. Main Street beats Walls Street is a learning site for Grasshoppers. Once in a while I make a move I would never want a Grasshopper to do. This is one of these trades. I make trades like this because I see something I think I can take advantage of, but I wouldn’t want new traders to try.
Earlier in the week I did a Covered Call with PTON. I bought 2000 shares of stock at $65.90 and sold 20 $66 Calls. I brought is a premium of $1.20 for $2400. This morning the stock was up big and I was set to be assigned. As the day moved along I was watching the candlestick chart and it looked like the stock was gonna pull back. This is when I made a very ballsy move. With the stock I sold my 2000 shares at $66.75 and went Naked on my 20 contract Call. Bought the stock at $65.90 and sold at $66.75 locking in a $1700 profit on the stock. The problem was I now have a 20 contract Call that was In-the-Money by $1.75 with a few hours to expiration. I needed the stock to go down.
7/13/20 – Buy 2000 Shares PTON @ $65.90
7/31/20 – Sell 2000 Shares PTON @ $66.75
Profit +$1700
Below is the trade notification I received when I sold the stock.
I made this move because I was predicting the stock was gonna fall below the $66 Strike Price before the close. It’s so important to be good at technical Analysis to make moves like this. This move is very dangerous! Not for Grasshoppers!
Lucky for me, and thank god I predicted correctly. The stock came down and I had an order placed to buy 2000 shares at $66, right on my Strike Price. I was filled and I was back in.
Buy 2000 Shares PTON @ $66.00
The stock went back up and closed at $68.22 so I’ll get assigned. This will be in my week ending report but I made $1700 on the stock and another $2400 with the premium.
Another wild trade was my 2 hour Covered Call with Pinterest (PINS). At 2pm I bought 1000 shares at $33 and sold a 10 contract $33 Call for a 50¢ premium.. This Call was to expire at 4pm. The stock closed at $34.29 so I’ll get assigned and keep the $500 premium.
As you might know Apple (AAPL) reported great earnings along with a 4:1 stock split. You might remember I bought 2 AAPL LEAPS last week. Today AAPL was up $40.28. My LEAPS are up big! The stock split will take place on 8/31/20 so if I hold on to these positions I’ll end up with 8 contracts with almost 2 years remaining before expiration. I think this will end up being a really good investment.
Successful Trading,
Steve
The Options Coach