Results Week Ending 10/16/20
Anyone in their right mind would love to have a week like I had this week. For that matter, most would love to have weeks like my last 25. And I am very happy! But something is not sitting right with me.
I’m trying to get out of all my stock positions for the election. If fact, that plan has been working well. This week I sold 1000 shares of Micron after holding for about 4 months and taking in some nice premiums. With the stock above where I bought I decided to just sell the shares without selling another Call.
Last Friday I was assigned on 1000 shares of Square and 3000 shares of Peloton. Putting me well on my way to my goal for the election of not owning stock.
This week I sold Covered Calls on Apple & Nvidia, and Naked Calls on Peloton & Square. My goal was to get assigned on Apple & Nvidia, and have Peloton & Square’s Naked Calls expire. In all trades I picked Strike Prices to help accomplish my weekly goal.
Apple I’m never worried about! If I have to hold this stock into the election I’m OK with that. This week I was not assigned and I hope to sell another Call this coming week.
Nvidia I was also not assigned. During the week it was well over my Strike Price but backed off. I would have loved to have been assigned. However, this week the 10 contract Call gave me a crazy premium of $10,000 and I’m hoping to get another big premium this week. But I’m concentrating on my main goal of getting out of all my stock. I still have a few weeks. Hopefully I’ll be out of Nvidia soon. Nvidia is a volatile stock so I would hate to see it take a big dip going into the election. If Monday is another good day I’ll get a Call sold with a nice premium. I bought the stock at $553.85 and it closed at $552.46. Not too bad!
Square is the only position that did what I wanted. I sold a Naked Call $10 Out-of-the-Money and the stock never got there. The Call expired like I wanted and I kept the $1100 premium.
Peloton was the thorn in my side. I sold 2 Naked Calls. I sold 10 contracts of the $135 Calls, which was $10 Out-of-the-Money, and I sold 10 contracts of the $140 Calls. I sold Naked Calls for the premium only. The stock went up above my $135 Strike but I covered the Call with the buying of the stock at $132.50. The stock stayed above my $135 Strike but below my $140 Strike. Everything was going great until Friday morning. By 10am the stock went up to $139.75 so I bought another 1000 shares to cover the $140 Call. I now had 2 Covered Calls and it looked like I’d be assigned on both. By noon the bottom was falling out of the stock and it went down below $130. It turned out I was not assigned on any Peloton stock. I still own the 2000 shares and the stock closed at $131.33. I keep the stock and I keep the premiums. The good news is I already sold Calls for next week for really nice premiums. I sold these right before the close on Friday. I sold another $135 Call for a premium of $4100 and I sold another $140 Call for a premium of $2750. Clearly I hope to get assigned next week.
The thing that got me so upset about Peloton is after I bought the shares to cover the $140 Calls I looked at the Relative Strength Index (RSI). It was up above 83 and the stock was in overbought territory. An RSI of 70 is the beginning of being overbought. If I took all the correct steps before buying the 1000 shares to cover the $140 Calls I would have seen the very high RSI. I would not have bought the shares. It was 10 in the morning! I would have watched for a while. The bottom line is if you want to be an option trader you really have to stay on top of your game. I think everything is gonna work out in my favor but it pisses me off that I didn’t notice the RSI level before I made a move.
Let’s take a look at this week’s trades.
Micron
These are the shares I sold. The stock didn’t move the way I wanted but I did well while holding. And sold at a profit!
6/30/20 – Buy 1000 Shares MU @ $51.75
10/13/20 – Sell 1000 Shares MU @ $52.50
Profit +$750
Inseego
I own 1100 shares of Inseego. The stock isn’t moving the way I’d like so I’m selling Calls to bring in premium money. I’m hoping to get another Call sold this week. Inseego does not have weekly options so I have to go out a month. If I can get 2 or 3% each time I sell a Call I’m happy.
9/28/20 – Sell to Open 11 INSG 10/16/20 $12.50 C @ 20¢ (+$220)
10/16/20 – Expired 11 INSG 10/16/20 $12.50 C
Profit +$220
Apple
Sold a Call, didn’t get assigned.
10/12/20 – Sell to Open 10 AAPL 10/16/20 $125.00 C @ $1.10 (+$1100)
10/16/20 – Expired 10 AAPL 10/16/20 $125.00 C
Profit +$1100
Nvidia
Sold a Call, didn’t get assigned. But look at this premium. Fantastic!
10/12/20 – Sell to Open 10 NVDA 10/16/20 $565.00 C @ $10.00 (+$10,000)
10/16/20 – Expired 10 NVDA 10/16/20 $565.00 C
Profit +$10,000
Peloton
I had to Cover a Naked Call but was not assigned.
10/12/20 – Sell to Open 10 PTON 10/16/20 $135.00 C @ 85¢ (+$850)
10/16/20 – Expired 10 PTON 10/16/20 $135.00 C
Profit +$850
Peloton
I Covered a Naked Call but was not assigned.
10/12/20 – Sell to Open 10 PTON 10/16/20 $140.00 C @ 50¢ (+$500)
10/16/20 – Expired 10 PTON 10/16/20 $140.00 C
Profit +$500
Square
Expired Naked Call.
10/13/20 – Sell to Open 10 SQ 10/16/20 $200.00 C @ $1.10 (+$1100)
10/16/20 – Expired 10 SQ 10/16/20 $200.00 C
Profit +$1100
Total Weekly Gain +$14,520
I don’t know why I’m beating myself up about Peloton. I made a lot of money with Peloton, and this is another great week. I just think I realize how easy it is to F**k up, and I know if you don’t do your homework and stick to certain rules, you will lose money! It’s hard enough being successful when you do everything perfect. But, as you see, if you stick to a game plan you can do great things.
Have a nice weekend!
Successful trading,
Steve
The Options Coach