Square “Buy-Write”

Square (SQ) reported earnings after the opening yesterday, which were a big beat. Barring no market collapse Sq should move up nicely for a while.

This morning I did a “Buy-Write” with 1000 shares. I bought 1000 shares at $184. I could have just held the stock for a while and enjoyed the inevitable gain, but I decided to stick to my strategy and sell a Call. I went with a 1 day trade. I bought the stock at $184 and sold the $185 Call to expire today. I received a great premium of $3 for $3000. This 1.6% premium would be very nice for a 1 week trade. For a 6 hour trade it’s fantastic!

Buy 1000 Shares SQ Q $184.00

Sell to Open 10 SQ 11/6/20 $185.00 C @ $3.00 (+$3000)

The way the stock is moving I have to believe I’ll get assigned on this position. With assignment I’ll lock in another $1000 gain with this trade. Clearly this trade gets a Risk Factor 1.

Successful trading,

Steve

The Options Coach