Results Week Ending 10/2/20

The election is getting close and I’m working on my plan on how I want to play it. I hope you’re doing the same. Before I talk about my plan I would like to talk about an email I received.

On Thursday and Friday I made a few trades with Draftkings (DKNG). Most know I’m pretty diligent when it comes to reporting my trades. Thursday and Friday I was extremely busy with students and trying to keep Fiore’s Pizza open during COVID-19, I feel behind on a few post.

It turns out I made 2 trades on Thursday where I sold a Call option and sold a Put option with DKNG. Both having the same Strike Price and Expiration Date. I didn’t get a chance to post the trades but they were listed on my “Active Trades” page. This happens from time to time.

I received an email from Doris asking for me to explain my strategy. I would like to thank Doris for not only reading my post, but also following my trades on my “Active Trades” page.

Below is the email I sent to Doris explaining why I made the trades I did.

__________

Hi Doris,

Thank you for reading! Sometimes I think things go unnoticed lol.
 
I’m sorry if I’m confusing you with my unorthodox trades. Let me first go through the timelines of the trades. Then I’ll try to explain.
 
On Thursday, Oct 1, I planned on doing a 2 day Covered Call with DKNG. This was gonna be an In-the-Money Covered Call. You really should buy the stock first, then sell the Call. At 11:10am, with the stock at about $60.50 I wanted to sell a 10 contract 10/2/20 $60 Call. The premium was $1.50. My plan was to sell the Call 50 cents In-the-Money and buy the stock at $60.50. This gives me a high premium and a better chance to get assigned. I would make $1500 on the premium and lose $500 on the stock assignment, leaving me with a net profit of $1000 for the 2 day trade.
 
It didn’t work out the way I wanted. When I placed the trade to sell the Call the stock was at $60.50. By the time I got filled the stock was at $60.60. My greed for the $1000 profit had me wait for the stock to get back down to $60.50, however, it never did. It never did come back down and before I knew it the stock was up to $61.50. Now if I bought the stock I would break even. I would make the $1500 premium but I would lose $1500 on the stock assignment. I decided to wait to see if the stock would come back down. It never did! 
 
At 3:30pm I started to think of strategies to make sure I don’t lose money. I decided to keep this Call naked to see what happens on Friday. But at $3:49 thinking the stock was not gonna come back down I decided to bring in some premium to help my situation with the selling of a $60 Put. At this point I felt the stock would never get back down to $60. I sold 10 contracts of the 10/2/20 $60 Put for a premium of 50 cents for $500.  Even with the announcement of Trump having COVID, and the market way down, DKNG still went up.
 
On Friday, with the stock still going up, I did a Roll-Out. I did a “Buy to Close,” bought the stock at $63.70, and did a “Sell to Open” for another 10 contract Call with the Strike Price of $65. This Roll-Out is now covered and will expire next Friday. If things go well, and I get assigned, I’ll make a total profit, for all the Roll-Out trades, of $1600. If I don’t get assigned I’ll make $300 and keep the stock. This does not include the $500 profit for the $60 Put I sold. Which is already expired.
 
So, the bottom line is the selling of the $60 Call and the $60 Put was not a strategy! It just worked out this way. I’m sorry for confusing you, but this is one of the reasons I didn’t post the trades. But I did put them on my “Active Trades” page. The other reason I didn’t post is I was busy teaching a class. I’ve been so crazy busy teaching! Maybe this is why I was not concentrating as well as I should have been. lol
 
I hope this helps,
 
Steve
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While I never wanted to use the strategy of selling a Call and selling a Put with the same Strike Price and Expiration Date, This is a strategy! This is a Straddle. If you buy a Call and a Put it’s a Long Straddle. If you sell a Call and a PUT it’s a Short Straddle. These strategies are for advanced traders, especially a Short Straddle.

Let’s get into my week’s results. I had another very nice week, but not without a bunch of trades. As my account grows I’ll be making more trades.

Nvidia

I got out of a LEAPS position with a $600 profit.

9/4/20 – Buy to Open 1 NVDA 6/18/21 $480.00 C @ $98.00

9/28/20 – Sell to Close 1 NVDA 6/18/21/$480.00 C @ $104.00

Profit +$600

Micron

Sold another LEAPS. Micron hasn’t been moving well. This one has a smaller profit.

8/17/20 – Buy to Open 1 MU 1/21/22 $45.00 C @ $9.80

9/28/20 – Sell to Close 1 MU 1/21/22 $45.00 C @ $12.80

Profit $300

Marvell

Another LEAPS sale, another small profit. However, the small profits are building up.

6/5/20 – Buy to Open 1 MRVL 1/21/22 $35.00 C @ $8.00

9/28/20 – Sell to Close 1 MRVL 1/22/22 $35.00 C @ 10.00

Profit +$200

Nvidia

This was a 3 contract LEAPS. Little more profit!

9/9/20 – Buy to Open 3 NVDA 1/15/21 $490.00 C @ $76.00

9/29/20 – Sell to Close 3 NVDA 1/15/21 $490.00 C @ $81.00

Profit +$1500 

PayPal

Assigned Covered Call. Made $1600 on the stock assignment and $3000 on the premium. Great trade!

9/14/20 – Buy 1000 Shares PYPL @ $188.40

10/2/20 – Assigned 1000 Shares PYPL @ $190.00

Profit +$1600

9/25/20 – Sell to Open 10 PYPL 10/2/20 $190.00 C @ $3.00 (+$3000)

10/2/20 – Expired 10 PYPL 10/2/20 $190.00 C

Profit +$3000

Micron

Covered Call without assignment.

9/25/20 – Sell to Open 10 MU 10/2/20 $52.00 C @ $1.00 (+$1000)

10/2/20 – Expired 10 MU 10/2/20 $52.00 C

Profit +$1000

Peloton

Assigned Covered Call. Similar to the PayPal trade above. $1000 on the assignment and $3000 on the premium.

9/28/20 – Buy 1000 Shares PTON @ $95.00

10/2/20 – Assigned 1000 Shares PTON @ $95.00

Profit +$1000

9/25/20 – Sell to Open 10 PTON 10/2/20 $96.00 C @ $3.00 (+$3000)

10/2/20 – Expired 10 PTON 10/2/20 $96.00 C

Profit +$3000

Square

Covered Call without assignment. I’ll sell another Call this week. I hope! The stock is very close to where I bought and was almost assigned this week. Let’s hope we have a strong open tomorrow. I’d love to get another great premium!

9/28/20 – Sell to Open 10 SQ 10/2/20 $170.00 C @ $2.50 (+$2500)

10/2/20 – Expired 10 SQ 10/2/20 $170.00 C

Profit +$2500

Apple

Late week Covered Call without assignment.

9/30/20 – Sell to Open 10 AAPL 10/2/20 $118.75 C @ 50¢ (+$500)

10/2/20 – Expired 10 AAPL 10/2/20 $118.75 C

Profit +$500

Peloton

With the stock at $100 I sold a $108 Naked Call. The stock actually went above $108. I ended up buying the stock at $107.75 to cover the Call but I was not assigned. I’ll sell another Call this week.

9/29/20 – Sell to Open 10 PTON 10/2/20 $108.00 C @ 70¢ (+$700)

10/2/20 – Expired 10 PTON 10/2/20 $108.00 C

Profit +$700

Stitch fix

I read a report that this stock was gonna go up this week, and it did. I sold a Put for the premium. The Put expired, I keep the premium!

9/24/20 – Sell to Open 10 SFIX 10/2/20 $25.00 P @ 50¢ (+$500)

10/2/20 – Expired 10 SFIX 10/2/20 $25.00 P

Profit +$500

Draftkings

This was the Put I sold on DKNG that was mentioned in the email above. The Put expired and I keep the $500.

10/1/20 – Sell to Open 10 DKNG 10/2/20 $60.00 P @ 50¢ (+$500)

10/2/20 – Expired 10 DKNG 10/2/20 $60.00 P

Profit +$500

Total Weekly Gain +$16,900

My account is growing because of my successful trading. Now my weekly gains are growing because of trading with a larger account. We have an election coming fast and I’m up well over 100% on the year. Not only is this a Presidential election, but it’s a very important Presidential election. A Presidential election loaded with a lot of uncertainty. We have completely different views on which direction the country should go. We have cities with civil unrest, a pandemic, a great economy that was hit hard by the pandemic, a media that is brainwashing the feeble minded with lies, a society that picks candidates on personality and not policy, a society that thinks only “the other party” lies, the list goes on! I don’t care what direction you want the country to go. I just want people to do their homework and vote for policy that will accomplish that. Stop listening to ALL the fake media, not vote on personality, and vote for the party that will work towards the policies you believe in.

Because I don’t think this will happen I have to do what I think is best for me and my family. And that is to be out of this stock market when our President for the next 4 years is announced. I worked my ass off trying to make a better life for my family, I don’t want to gamble and have it evaporate because the voters of this country didn’t do their homework. And, if everyone does their homework and the market doesn’t like their decision, I would like to be on the sidelines with my money. I’m gonna try to be out of most positions on Nov 3rd!

Enjoy the rest of your weekend!

Successful trading,

Steve

The Options Coach