Palantir Update and a Couple of Trades at the Close
Before I get into how my Palantir Trade worked out I want to report a couple of trades.
Well, it was a very busy day. I made a bunch of trades and I have 2 more to report. These trades were made at the close and were not reported. After the bell I had to run out to get a new cell phone. I’m back home, I had my dinner and I’m sitting down to finish up my work on Main Street beats Wall Street.
On 11/20/20 I bought 300 shares of Nvidia (NVDA) at $536.58. I’ve been quite active with this stock and today at the close I was filled on another Call. With the stock at $535 I sold 3 contracts of the NVDA 12/4/20 $540 Calls for a premium of $6.25 for $1875.
Sell to Open 3 NVDA $540.00 C @ $6.25 (+$1875)
This is a Covered Call on previously owned stock so this trade gets a Risk Factor 1. This is a great stock so I really don’t care if I get assigned or not. If I don’t I’ll sell another Call.
I own 400 shares of Zoom at $508. I really wanted to get a Call sold because they were reporting earnings after the close and I felt it would be a good report. With the stock around $475 I sold 4 contracts of the ZM 12/4/20 $520 Call for a premium of $16.50 which gave me a grand total of $6600. The premiums wires high because of the earnings report. I figured I already own the stock I might as well reap the benefit of the great premiums. If the stock gets up to my Strike Price of $520 I’m happy to get assigned. If not, either way I keep the $6600 premium.
Sell to Open 4 ZM 12/4/20 $520.00 C @ $16.50 (+$6600)
After the close the earnings were reported. They blew it out of the water! A great report! I guess it was a case of “buy the rumor, sell the news” because the stock ended going down about $25 in the after hours. I hope the stock comes back up but I’m a little worried because, in my opinion, the stock is overpriced. Again, either way I keep the $6600.
Let’s get into Palantir. To recap, I owned 4000 shares at $18.47. Last Monday I sold 40 contracts of the $19 Calls to expire this past Friday. The stock closed at $27.66. When I got up on Saturday and went to write my Results Week Ending 11/27/20 I opened my account to confirm I was assigned on my 4000 shares. It was then I noticed I was only assigned on 1700 of the 4000 shares. Normally the settlements are done by Saturday morning so I was a little confused. I waited until late afternoon and I still owned 2300 of the shares. You must understand the stock closed $8.66 In-the-Money. If a stock closes 1¢ In-the-Money you get assigned. I called my broker and they said you have to give it until Monday’s open. Well, this morning came and the shares were still in my account. This is the craziest thing that ever happened in my 30 years of trading. I still own 2300 shares of a stock that is $8.66 In-the-Money! That’s $19,918! Why was I not assigned? I have no Idea!
This morning palantir was all over the place. And moving fast. Before you knew it the stock was down to $26. I decided to sell 300 shares and hold the other 2000 shares to sell a Call. I already have a 20 contract Covered Call, this will make another 20 contract Covered Call. However, I never got a Call sold. I’ll try again tomorrow. The stock closed at $27.22.
Buy 300 shares PLTR @ $18.47
Sell 300 Shares PLTR @ $26.00
Profit $2259
I hope to put my good fortune of not getting assigned to work with another Covered Call. Watch for that post tomorrow.
I make my adjustments on the “Active Trades/Current Positions” and “Trade History 2020” pages right after the close on Friday. On those pages I listed that I was assigned on all 4000 shares. I have since adjusted the pages to show I was only assigned on 1700 shares. The Trade History 2020 page had that my weekly gain was $17,670. Since I was only assigned on 1700 shares and not 4000 shares my weekly gain has been adjusted to $16.451. I did not realize the gain from the 2300 shares yet because I still owned them after the weekend. Maybe they’ll be in this week’s total.
As I said, not getting assigned on 2300 shares that were $8.66 In-the-Money is crazy. Something I never saw before. Let me make something very clear for the Grasshoppers. You will never see this again! I don’t care how long you trade, mark my words, you will NEVER see this again. PERIOD! So, never get into a Covered Call thinking it can close In-the-Money and maybe you won’t get assigned. You will get assigned! I am still confused. The only thing I can think of is someone goofed up because the market closed at 1pm and not 4pm. Maybe they were not home but planned on being home to close out the position before 4pm, then realized the market closed at 1pm. I don’t know. I do know one thing, one of my favorite charities will be very happy before the end of the week.
I’m almost caught of with my work but I still have to talk about Tesla. I’ll write about it tomorrow!
If you have any questions on this strange occurrence send me an email.
Successful trading,
Steve
The Options Coach