Bought 5 Workhorse LEAPS
Most know I’m not an options buyer, but if I do they are long term options, LEAPS.
In the last week I exited 2 positions with Workhorse (WKHS). I sold a 2 contract LEAPS I bought 2 months ago, and I was assigned on a 10 contract Covered Call. The LEAPS gave me a 93% return and the Covered Call gave me a 7% return for the 5 day position.
I really like the electric vehicles stocks, and WKHS is one of my favorites. They make electric vans and small trucks, and have contracts with some of the delivery companies like UPS and FedEx.
With the market down the last few sessions, today WKHS was at $27.50 when I decided to buy 5 LEAPS. The stock has been as high as $30.99. I looked at this as a good opportunity to get back into a WKHS position. I bought 5 contracts of the 1/21/22 $30 Calls for a premium of $15.
Buy to Open 5 WKHS 1/21/22 $30.00 C @ $15.00 (Delta .76)
Since I’m having a great year I’m gonna try to get out of positions for the election. If needed I can hold this one well past the election. This position does not expire for another year and a half.
I invested $7500. If I bought the stock I would have invested $13,750. This is a little more than I like to spend for a LEAPS, but this position has a Delta .76. This means my position will increase in value 76¢ for every $1 move in the stock. That’s a nice Delta.
A I was finishing up this post I was filled on a trade. Earlier I placed an order to sell my 1 contract PINS LEAPS. The stock is moving today but I didn’t like the way it’s been moving since I got into the trade. I decided to free up the money and invest it elsewhere.
8/3/20 – Buy to Open 1 PINS 1/21/22 $35.00 C @ $11.00
9/22/20 – Sell to Close 1 PINS 1/21/22 $35.00 C @ $13.00
Profit +$200
I bought this 1 contract on 8/3 for $1100. I just sold for $1300, a $200 profit. In the 6 weeks is a Return of 18%. Not bad for am extremely safe position. I hope I do as well with my Workhorse position above.
This would have been a great trade for a Grasshopper with a smaller account.
Remember, it’s all about the Return on Investment (ROI). NOT how much you make.
Successful trading,
Steve
The Options Coach