Filled on 3 Trades Involving T, CRWD & NVDA
I placed 3 trades and I was filled on all.
Back on 7/23/20 I bought 10 LEAPS with AT&T (T). I bought 10 contracts of the AT&T 1/21/22 $30 Calls. I paid a premium of $3 for a total of $3000. At the time I liked the telecom stocks and AT&T was my favorite. It did not move much in the 5 months since I bought the position so I decided to jump ship with a small profit.
7/23/20 – Buy to Open 10 T 1/21/22 $30.00 C @ $3.00
12/9/20 – Sell to Close 10 T 1/21/22 $30.00 C @ $3.20
Profit +$200
Whenever I buy an option, even if it’s a LEAPS, I want it to move fast. I want to get profit, get out, and move on! I buy the longer term options for protection against Time Decay just in case the stock doesn’t move fast. With this position I only made $200, but if I bought a short term option I would have lost money – for sure! The stock just didn’t move fast enough.
If you’re gonna buy options be very careful! Know how premiums are priced and know exactly how Time Decay works.
On Monday, with Crowdstrike (CRWD) at $171 I sold 10 contracts of the 12/11/20 $180 Naked Call. I received a premium of $1.35. With a Naked Call, clearly I don’t want the stock to go up. I want my Call to expire with the stock below $180.
In the last few days CRWD moved up and got uncomfortably close to my Strike Price. Today the stock was up again. An hour or 2 into the trading day the market reversed and CRWD started down. With the stock down $10, and the premium at 30¢, I decided to close the position and lock in a $1050 profit. The odds are the stock would not get up to my Strike Price by Friday, but you never know. Why mess around with a Naked Call on a very volatile stock? This position is closed!
12/7/20 – Sell to Open 10 CRWD 12/11/20 $180.00 C @ $1.35 (+$1350)
12/9/20 – Buy to Close 10 CRWD 12/11/20 $180.00 C @ 30¢ (-$300)
Profit +$1050
With Nvidia (NVDA) down with the rest of the market I was thinking of buying 200 shares at $520 and selling a Call to expire on Friday. As the stock continued down I figured, why not get paid to buy the stock? I sold 2 contracts of the 12/11/20 $512.50 Puts and took in a premium of $2.50 for $500.
I was gonna buy at $520, but now I brought in a $500 premium and I’ll buy the stock at $512.50, if the stock gets down to that price. If the stock doesn’t get down to that price the Put will expire and I keep the $500. If the stock gets down to $521.50, I’ll have the stock put to me at that price, and I also keep the $500 premium.
Sell to Open 2 NVDA 12/11/20 $512.50 P @ $2.50 (+$500)
The market is looking pretty ugly! I’m looking OK!
Successful trading,
Steve
The Options Coach